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Last Updated: Mar 31, 2009 - 2:29:20 PM |
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Victor Plastics announced on Friday that it had signed a letter of intent to sell to Riverbend Industries of Ft. Smith, Ark. The Victor Community Development Association stands in support of the possible purchase. Pictured above, River Bend Industries headquarters in Ft. Smith. Mike Morelock Photo for The East Iowa Herald
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VICTOR – Victor Plastics announced on Friday that it has signed a letter of intent to sell the company to River Bend Industries of Ft. Smith, Ark. The announcement was made by Victor Plastics chief executive officer Tim Czmiel.
Czmiel said that River Bend is a highly successful and respected company in the plastic injection industry and he expects to sign a purchase agreement within the next 14 days. Following the execution of the purchase agreement with River Bend, a motion will be filed with the Bankruptcy Court for authority to hold an auction which will be open to all interested and qualified parties. The winning bidder will need to be approved by the Bankruptcy Court at a hearing to follow the auction.
For Ron Embree, CEO of River Bend Industries, the situation with Victor Plastics is like déjà vu all over again.
In October 2006, Moll Industries of Dallas, Tex., announced it would close three plastics injection plants in Ft. Smith, LaVergne, Tenn., and New Braunfels, Tex. Employees of the plants – some with more than 20 years on the job - were told they would be out of work by the first of the year.
Enter Ron Embree. Only a month after that announcement, Embree, a former plant manager and company president who had left Moll Industries several months prior, formed River Bend Industries with the backing of Palomino Capital of Dallas. River Bend purchased the Ft. Smith plant and then set out to rebuild ties with both the plant employees and with Whirlpool, the company’s major customer.
A news story in the Ft. Smith Times Record written a month later mentioned the relief employees felt with the change in management and with keeping their jobs.
“It’s almost scary how similar it is,” Embree said, referring to Victor Plastics. “We’re excited about it, we feel good about this happening and we’re looking forward to making it happen.”
The letter of intent includes all three Victor Plastics plants.
“It’s been a tough battle for the past few weeks but I think we have a good buyer,” said Dr. Leonard Seda. Seda is the president of the Victor Community Development Association and has been involved in finding a buyer since the bankruptcy was announced last month.
“Because he’s been through this kind of scenario of going through a bankruptcy and revitalizing a down organization, he definitely brings to the table a knowledge of getting things into place. He’s been there, he knows how it works,” Seda continued.
For his part, Embree downplayed his involvement – but not the future of Victor Plastics.
“I think the chances of a sale are very high,” he said. “The confidence that it will be River Bend is probably a little less than that - but we still have the advantage.”
Embree also has the backing of the VCDA.
“We had a conference call last Friday morning with our entire VCDA board and he explained what he is about and fielded a lot of good questions,” Seda said. “What we like about him is that not only is he a practical leader of an injection molding process but the people who have met him are very impressed with him and his abilities.”
According to Seda, some employees from the Victor plant had the opportunity to meet Embree while working in the Flora, Miss. plant. All were left with a favorable impression.
As for Victor Plastics employees, the future is not yet entirely clear but according to Seda – and based on Embree’s history – there is reason to breathe easier.
“He mentioned in our interviews that he would like to use the same labor force and would try to provide the benefits they are used to, within reason,” Seda said.
When asked, Embree said that he was unable to discuss the details at this time.
“We still have to negotiate a purchase agreement,” he said. “There will still be some weeks involved in this.”
According to Seda, a turnaround is already occurring at the Victor Plant.
“They are currently rehiring some of the people they laid off,” he said. “That’s a real positive.”
Another positive is the success of River Bend Industries itself. Taking a company from the very brink of collapse just over two years ago, the Ft. Smith facility alone is reportedly generating in excess of $50 million in revenue today. Whirlpool, their major customer, also reported healthy sales and profit increases earlier this month, thus helping to ensure the future of River Bend.
Seda did voice concerns over some media reports that a buyout could mean that Victor Plastics will leave the state. He went on to say the strong customer base and the difficult-to-move equipment at the Victor Plant suggest otherwise.
“I don’t like that spin because that is not what I believe is going to happen,” Seda said. “Ron feels that the Victor plant is a very important cog in the industry - and that the big machines there have a definite future in the industry. I agree with that.”
Just over a year ago, Embree and River Bend Industries rescued one of three plants that appeared to be headed for a rapid closure. Now, with circumstances eerily similar to that, he hopes to do the same thing for all three Victor Plastics plants. Seda feels that he will be able to do just that.
“We had three bone fide potential buyers,” Seda said. This one fits the best in many ways – in knowledge of the industry, in know-how and how they feel they will handle the site here. He is what we would call a strategic buyer.”
“I think it’s a good thing for the area, for the facilities and for the customers,” Embree said. “I would say that it’s almost certain that someone will buy this company.”
Many people are hoping that someone will be Ron Embree.
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