Ameriplas to produce fifty million preforms for Canadian bottling firm

Vancouver-based Ameriplas Holdings Ltd., has signed on to immediately start producing about 50,000,000 polyethylene terephthalate (PET) preforms for a Canadian-based bottle company.
The preforms are being manufactured at Ameriplas’ facility in St-Jean-sur-Richelieu, Que., which was built in 2004. The construction took a financial toll on the company, but recovery was kickstarted in April 2005 when Ameriplas announced a deal to produce over 200 million preforms for a bottling company in the U.S.
Ameriplas expects this new deal to generate sales over $600,000 in the first year and approximately $ 800,000 in the second year. “After the excitement of building our new plant in 2004, we were hit with problems late in the year. Adding new customers is one important step among many that we are taking to rebuild the Company’s working capital position. It also shows that there is still a very strong demand for preform production,” said Ameriplas President, Clement Lussier.
These preforms are primarily used to produce bottles is for bottled water, which is the fastest growing segment of the beverage industry. Other uses include soft drinks, sports drinks and beer.
Ameriplas’ most recent financial data is from the third quarter (Q3) of 2005, where the company reported a profit of $43,219, which the company said resulted the firm’s re-formulated business model; that is, the company secured contracts that didn’t require the purchase of raw materials.
As a result, Ameriplas’ total sales were lower than in comparative periods because raw materials can make up to 70 per cent of the cost of the products they sell. However, while the sales figures are lower, the gross margin percentage has significantly improved.
During the nine months that ended on Aug. 31, 2005, Ameriplas had a gross margin of 8.7 per cent compared to 5.4 percent in the same period of 2004.
During Q3, the company increased production each month, and achieved a gross margin of 27 per cent compared to about nine per cent for Q3 2004.
In its Q3 financial report, Ameriplas also announced that its cash management plan has helped the business reduce its liabilities by $382,000 including the reduction of the line of credit by $321,000.