2007: THE WAY IT WAS
NOT A HALLMARK MOMENT . In what may be a sign of the proverbial times, Windsor, Ont.-based moldmaker Hallmark Technologies Inc. went under in February. The automotive-focused company was one of the bi...
NOT A HALLMARK MOMENT. In what may be a sign of the proverbial times, Windsor, Ont.-based moldmaker Hallmark Technologies Inc. went under in February. The automotive-focused company was one of the bigger players in the local mold, tool and die sector, and industry followers feared a ripple effect. Over 150 employees were laid off, and the company owed approximately $10 million in secured debts. Additionally, Hallmark owed almost $35 million to approximately 331 unsecured creditors, including several local tool shops.
COLLINS & AIKMAN’S CHAPTER 11 WOES. Not to be outdone, bankrupt automotive parts manufacturers made the headlines this year. Collins & Aikman, in particular, had a tumultuous year, with on-again off-again liquidation deals, strikes at two of its Canadian plants over severance pay and charges of fraud against the company’s former executives. However, some good news did come out of the sector: in March 2007, we reported that Allen Park, Mich.-based Meridian Automotive Systems, Inc. had emerged from Chapter 11.
MORE FOR LESS AT PLAST-EX 2007. The industry put its best face forward during a scaled-back Plast-Ex 2007, which ran May 1 to 3. Trimmed from the traditional four days to three, the show nonetheless presented a number of memorable moments. The Canadian Plastics Sector Council used the show to launch its new Certified Plastics Practitioner designation, prominent industry analyst Dennis DesRosiers waxed optimistic about the future of the North American auto sector, and famed Maple Leaf goaltender Johnny Bower delighted showgoers at Wittmann Canada’s hockey-themed booth.
PAPER OR PLASTIC? Leaf Rapids, Man. became the first North American community to formally ban single-use plastic bags, and the small Canadian town became a source of inspiration for other municipalities. Even the provinces have gotten in on the action: the Canadian Plastics Industry Association (CPIA) endorsed the Ontario government’s plan to reduce plastic bags by 50 per cent by 2012, and one provincial party leader in Manitoba is contemplating a province-wide bag ban.
LOONIE TUNES. After hitting an all-time low in 2002, the Canadian dollar reached parity with the U.S. greenback for the first time in more than 30 years. Although this is great news for manufacturers looking to invest in new technology — much like the bargain shoppers crossing the Canadian border, manufacturers can get more for less — industry experts were left wondering about the value of Canadian exports.
AUXILIARY ANXIETY. It was almost impossible to keep up with all of the moving and shaking in the auxiliary equipment segment. Wittmann Canada purchased the M-Tek line from Mould-tek Industries Inc., adding to its stable of products. Bolton, Ont.-based Husky Injection Molding Systems Ltd. purchased Moldflow Corporation’s Manufacturing Solutions Division, which included the Altanium brand of temperature controllers. Maguire Products Inc. established a Canadian subsidiary in Vaughan, Ont. And Mississauga, Ont.-based Hamilton Avtec joined forces with Conair.
LEAN MACHINES. Injection molding machine (IMM) manufacturers made some major changes to their North American operations. Schwertberg-based Engel Austria GmbH announced a US$4 million investment over three years to modernize its North American production network. The company also relocated its headquarters from Guelph, Ont. to York, Penn. Demag Plastics Group announced that it would end production at its Strongsville, Ohio plant, and focus on sales, service and technical support for the North American market instead.
CHEMICAL REACTIONS. 2007 was the Year of the Chemical Acquisitions: in July, research firm Dealogic estimated that chemical deals were up 76 per cent globally. And although everyone was talking about the sale of GE Plastics to Saudi Basic Industries Corporation (SABIC) for a respectable price tag of US$11.6 billion, the acquisition paled in comparison to Basell’s purchase of Lyondell Chemical Co. According to Dealogic, the Dutch chemical company’s US$12.1 billion purchase was the most costly chemical M&A to date!
BIOPLASTICS CROP UP EVERYWHERE! The regular players in the bioplastics field such as NatureWorks LLC, and Cereplast, Inc. boosted their commercial presence this year, and Brazil-based Braskem and Mich.-based Dow Chemical Company both announced that they would make polyethylene out of ethanol from sugar cane. On the R&D end, the Ontario government invested $5.9 million in the Ontario BioCar Initiative, a bio-based automotive manufacturing project headed up by University of Toronto chemical engineering professor Dr. Mohini Sain.
HUSKY CHANGES HANDS…PROBABLY. In September, another chapter appeared written in the tale of one of Canada’s most famous plastics companies when Husky Injection Molding Systems Ltd. accepted a buyout offer of approximately $960 million from Toronto-based private equity firm Onex Corporation. Robert Schad, Husky’s founder and controlling shareholder, and his spouse, Elizabeth Schad, have agreed to tender their 47.7 million common shares, plus just fewer than four million shares they control. The acquisition hit a bump in October, however, when Robert Beauregard, a five per cent shareholder in Husky, decided the offer was too low and encouraged other shareholders to resist the buyout or ask for a bigger offer.