Ameriplas increases production while reducing debt
Canadian PlasticsCanadian Plastics
Production has increased dramatically at Ameriplas Holdings Ltd., in Saint-Jean-sur-Richelieu, Que., ever since it ...
Production has increased dramatically at Ameriplas Holdings Ltd., in Saint-Jean-sur-Richelieu, Que., ever since it signed a deal in April 2005 to produce 200 plastic preforms for a large U.S. water bottling company.
To compensate for this new demand, Ameriplas had to increase its production of plastic preforms by 20 million units per month, the company said July 25.
Ameriplas’ preforms are made of polyethylene teraphthalate (PET).
Back in April, Ameriplas was experiencing financial difficulties, so taking on new customers while trying to reduce debt was a challenge. However, the U.S. water bottling firm, with which Ameriplas signed the April contract, provided the company with an injection molding molding machine, with a low implementation cost of only $40,000, Ameriplas said at the time. This enabled Ameriplas to increase its capacity at a low price.
“After the excitement of building our new plant in 2004, we were hit with problems late in the year,” said Clement Lussier president of Ameriplas, in a statement last April.
“Adding such a large new customer is one important step among many that we are taking to rebuild the Company’s working capital position,” he added. “It also shows that there is still very strong demand for preform production.”
Now, the company says demand for preforms remains strong and the firm is managing to find ways to manage its cash flow tightly in order to pay debts to suppliers, while still servicing its own customers.
Additionally, Ameriplas expects to receive an $80,000 grant from Investment Quebec, which had been delayed, which will be used to increase the firm’s working capital.
The company is also completing a private placement of 350,000 units at $0.15 each unit is comprised of a common share and one non-transferable share purchase warrant. Each two warrants entitle the holder to purchase an additional common share of the company at $0.35 during the next 12 months.