The rigid plastics business delivers 15% revenue and 26% of the EBITDA based on the investor presso on 25th August.
I believe the board said some time ago they would focus on the flexibles business which makes sense, hence why they looked at offloading the Rigid business.
They obviously couldn't get enough for the rigid business and so held onto it. They will use it as a cash cow and as a result will starve it of capital. It will slowly become a trading business and I suspect that eventually the manufacturing operations will close. They will move into low end competitive segments of the market as a result. Why they have manufacturing capability they the opportunity to go after higher value added business and stay clear of the commodity end of the market place.
They they can sell the business it will then provide cash for further investment into flexibles give them greater penetration and focus!
We will just have to wait and see.
PPG Price at posting:
20.0¢ Sentiment: None Disclosure: Not Held
