Canadian Consumers Packaging Inc., based in Toronto, has entered into a letter of intent to acquire its first container glass plant in the US. In 1995, the company was an unsuccessful bidder for Foste…
Canadian Consumers Packaging Inc., based in Toronto, has entered into a letter of intent to acquire its first container glass plant in the US. In 1995, the company was an unsuccessful bidder for Foster-Forbes, which was bought by a joint venture between Ball Corp and Saint Gobain. Consumers Packaging is negotiating to buy the Hillsboro Glass Co. which operates a container glass plant in Hillsboro, Illinois. The plant is owned by Hiram Walker & Sons Ltd. and manufactures amber whiskey bottles. In a separate deal covered by the letter of intent, Consumers Packaging will also become Hiram Walker“s exclusive supplier of glass bottles in North America. Hiram Walker has filling plants in Canada, Arkansas, (US) and The Bahamas. A spokesperson for Consumers Packaging said that the supply agreement will nearly triple the amount of business the company does with Hiram Walker. Both agreements are subject to the respective parties obtaining board approval. Consumers Packaging is Canada“s largest and North America“s fourth largest glass container manufacturer. The company is controlled by G & G Investments Inc. of Pittsburgh, which also owns 100% of Glenshaw Glass Co. Inc. of Glenshaw, Pennsylvania, US, and has a 25% interest in a glass plant in Mexico. Hiram Walker is owned by Allied Domecq Plc., the world“s second largest beverage alcohol company. Profits at Consumers Packaging Inc., Canada“s only maker of glass containers, increased slightly in 1995 on a 5% increase in sales. However, its fourth-quarter profit plunged to C$ 1 million (3c a share) from a restated C$ 3.2 million (11c) in the same period a year earlier. “Our inventories had grown to a very high level,” said William Lightner, vice-president of finance and chief financial officer for the company. To reduce them “to a more manageable level” the company shut down some operations in the fourth quarter, he said. Sales for the quarter ended 31 December 1995 were up 5% to C$ 105.1 million, compared with C$ 100.5 million. The company said year-end profit from continuing operations in 1995 was C$ 26.2 million (90c fully diluted) compared with restated earnings of C$ 24.8 million (93c) in 1994. Consumers Packaging is restating 1994 earnings after abandoning an accounting practice begun in 1988. The company is now capitalizing the cost of its glass moulds and recognizing the depreciation of inventory. Including a gain of C$ 1.3 million (4c) from discontinued operations, restated earnings in 1994 were C$ 26.1 million. Before the restatement, earnings for 1994, including the gain, were reported as C$ 30.1 million. Sales for the year were C$ 458.1 million, a 5% increase over the C$ 438.1 million reported the previous year. “With almost 80% of the Canadian glass packaging market, we have identified a number of international opportunities and, in 1995, expanded our presence in the US, Europe and Latin America,” said chief executive John Ghaznavi. “This resulted in an increase in our export sales by 51% over the previous year.” Earnings per share were affected by the issue of 4.6 million common shares in September, netting C$ 57.2 million, which the company said was used to cut long-term debt from C$ 135.6 million to C$ 79 million. “As part of our efforts to support our continued growth, our capital expenditures for 1995 totalled C$ 52.8 million, following on the previous year“s C$ 51.5 million,” Ghaznavi said.