API Group sells Chinese foil ops
The 51-per-cent share of the company’s Shanghai foil manufacturing operations has been acquired by a subsidiary of API’s former Chinese partner for US$2.8m (€2.04m). Proceeds from the sale will be used to pay down the remaining portion of high interest bearing debt for the UK company.
Declining margins, rising raw material costs
In December, API said plans were at an “advanced stage” to off-load the business over its continued failure to turn a profit. The Shanghai company posted operating losses of £2.6m (€3m) and £2.4m in the twelve month periods to 31 March 2009 and 31 March 2010 respectively.
API said that even though sales to the end of September 2010 had seen a dramatic year-on-year jump of 59 per cent, losses for the six months to the end of the period had reduced only marginally to $1m. The firm blamed “declining margins and the impact of higher raw material costs”.
The move marks API’s exit from China although it said it would “continue to develop its foils business in China, and Asia more generally”, through its trading office in Hong Kong and its regional distribution partners.
“Exiting the loss-making joint venture in China will further strengthen the Group's performance,” company chief Executive Andrew Taylor said last month.
Continuing operations of the company now comprise its European laminated packaging material business, foil manufacturing and distribution operations based in the US, as well as Europe and foils distribution units in the Asia Pacific region.
