Visy lining up Alto Plastics

Another New Zealand business could fall into Australian hands with the planned purchase of Alto Plastics by Australian packaging giant Visy.

Visy is seeking clearance from the Commerce Commission to buy Alto which, since buying and delisting rival Vertex last year, is the country's largest producer of rigid plastic products.

Alto managing director Mark Wheeler said the privately owned company had made no agreement to sell to Visy.

However, Visy's wish to consolidate the market was well known and Alto would be interested to hear what it proposed.

"Our desire is to consolidate the market as well so we'd be interested in what their view is," said Wheeler. "Anything could happen."

Vertex was formally amalgamated with Alto last week, almost a year after its $67 million takeover through Masthead Equities - the private investment company of the Stewart family of Christchurch.

Masthead director Mark Stewart and Wheeler are the two main shareholders.

Combined annual sales of the businesses, worth $150 million at the time of the merger, now sit at $170 million with further growth anticipated.

Exports have grown from $10 million to $35 million and staff numbers have grown to 840.

Visy was believed to be one of two mystery bidders who emerged and then disappeared during the three-month takeover. The Melbourne-based company, owned by the Pratt family, is one of the world's largest privately owned packaging operations, with revenues of more than $3 billion and more than 8000 employees.

Total manufacturing revenues exceed $2.8 billion.

In considering Visy's application, the commission will determine whether the acquisition has the effect of substantially lessening competition in the market.

Wheeler did not expect clearance would be a big issue.

He said one of the biggest threats facing the industry was that local manufacturers lacked scale in the global marketplace and sometimes struggled to be competitive. "If we are not progressive in this regard, cheap imported goods will erode our manufacturing base."