As ever, our overriding motivation is to capitalise on the organic growth potential in our businesses through innovation whilst pursuing our acquisitional strategy in product and geographical areas of interest to us. We remain optimistic for the outcome of the year and confident in the success of our long-term business growth strategy.
British Vita plc manufactures and processes a wide assortment of polymers, including cellular foams, synthetic fiber fillings, specialized and coated textiles, and polymer compounds and moldings. The company's products are used in furniture, carpet underlay, bedding, apparel, automobile seat cushions, and more. British Vita is made up of three divisions--the industrial group makes thermoplastic sheet goods, the fiber and fabric division makes products used in clothing and construction industries, and the foam group makes cellular polymer products that account for 55 percent of total company sales.
Early History: 1950s-70s
Founded with £100 by Norman Grimshaw in 1949, the company first began business as Vitafoam Ltd. in Oldham. Its primary business was the manufacture of foam cushions and mattresses. Vita's first regional foam conversion plant was opened at High Wycombe, approximately 30 miles northwest of London, in 1954. The main office was moved to Middleton in 1957, and the company acquired Liverpool Latex the same year. By 1960 Vita established its first foreign division when operations commenced in Rhodesia (now Zimbabwe). Another plant opened in Nigeria in 1962.
Vita's history is one of aggressive mergers and acquisitions that have allowed the company to expand its product base and market. The company was incorporated as British Vita Company Ltd in 1966, the same year that J. Mandelberg, a maker of coated fabrics and flame laminating, was acquired. Throughout the 1960s, Vita worked to diversify its product line, adding polyether foam, pvc foam, carpet underlay, general rubber molding, and coated fabrics. In 1967 the company celebrated its listing on the London Stock Exchange.
By 1968 Vita had 15 operations throughout the United Kingdom involved in the manufacturing of latex, polyurethane and polyvinyl foams, precision mold and pattern making, footwear components, fabric coating, and laminating. Its foreign holdings were expanding as well, and in 1971 British Vita International Ltd was formed to supervise the overseas operations. During the 1970s, Vita began to decentralize its operations and adopted new methods to cut costs and increase efficiency. At the same time, the company was expanding its foreign holdings into Australia, Canada, Indonesia, New Zealand, Japan, and Egypt.
Vita's management team has been singled out for its longevity and stability. Fernley Parker joined the company in 1954 and rose steadily through the ranks as corporate secretary, finance director, and chief executive officer before serving as chairman for ten years. He retired from the board in 1987 but remained involved in the company as chairman of British Vita Pensions Trust Limited. Robert McGee succeeded Fernley Parker as chief executive officer in 1975 and again as chairman in 1988. McGee had spent virtually all of his business career with Vita. He was hired in 1955 and was appointed to the board in 1972. Rod Sellers, McGee's successor as chief executive officer, had been with the company since 1971. Vita's deputy chief executive officer, Frank Eaton, was likewise a long-term employee of the company. Eaton was hired in 1958, was appointed to the board in 1975, and would not retire until 1999.
Continued Growth Through Acquisitions: 1980s to Early 1990s
In 1978 Vita acquired Libeltex and Portways, both fiber manufacturers, and Caligen, a foam manufacturer. For the next five years, the company concentrated on developing its fabric knitting and finishing operations. During the 1980s, Vita continued to acquire companies that allowed it to increase its holdings. The European market was expanded through the acquisition of Tramico in France, Isofel in Spain, and Koepp/Veenendaal in Germany and The Netherlands. A joint venture with Viktor Achter, an automotive fabric firm, resulted in the formation of Vita-Achter. The industrial products division was expanded with the acquisition of three firms: PEC Plastics, Inversale, and Rubber Latex Limited. The latter is now known as Vita Liquid Polymers in the United Kingdom and as RLA Polymers in Australia.
During 1987 Vita further expanded its operations through acquisitions, the building of new plants, and the implementation of innovative production procedures. The German-based Metzeler Schaum group and Royalite Plastics, with operations in Scotland and Italy, were added to the Vita conglomerate. The company formed a new division, Engineering Thermoplastics, enlarged its coated fabrics operation, and began to manufacture staple fibers.
Vitafoam introduced combustion-modified high resilience foams in 1988. That same year, ICOA group of Spain and the UK-based Rossendale Combining Company were acquired. Acquisitions in 1989 included Esbjerg Thermoplast in Denmark; Alpha Flock, a manufacturer of fiber for electrostatic spraying in the United Kingdom; and Ball & Young Adhesives, a U.K.-based maker of rubber carpet underlays. Vita also purchased one-third of the Spartech Corporation, a manufacturer of engineering thermoplastics in the United States. A series of smaller acquisitions the following year allowed Vita to further strengthen its fiber processing, thermoplastic engineering, laminating, and foam operations.
In 1991 Vita made more inroads in the U.S. marketplace with the acquisition of a portion of Leggett & Platt in Missouri, which became Vitafoam Incorporated, with foaming plants in High Point, North Carolina, and Tupelo, Mississippi. In 1992 the Libeltex subsidiary obtained Sporta Vadd and its two fiber-processing operations, and Norman BV, a 100-year-old foam mattress manufacturer in The Netherlands, became part of Vita Interfoam. Yet another foam mattress company, Oost BV and its subsidiary, Sanaform BV, were acquired later the same year.
Although the company continued to enjoy growth and prosperity, Vita faced many of the same problems other businesses endured in the early 1990s. The economic recession in the United Kingdom slowed production. Increased competition from Italy and the restructuring of the automotive industry in Germany also affected Vita's growth in France and Germany. In addition, environmental regulations placed new restrictions on manufacturers, requiring them to modify some equipment. In 1993 Vita was forced to dispose of ICOA in a management buyout. Further restructuring was planned for Metzeler Laminados, one of the two remaining Spanish operations. The prolonged drought in Africa affected profits in the Zimbabwe companies. The company, however, remained optimistic about its growth potential and credited improvements to its manufacturing and quality systems as well as innovative product development as reasons for its continued success.
Acquisitions continued in 1993 with the purchase of Pre-Fab Cushioning in Canada and Nabors Manufacturing in the United States. In France, Vita acquired Pullflex, specialist foam converters, and the Gaillon Group, a Lyon-based manufacturer of thermoplastics. A subsidiary was formed in Poland with construction under way on a new factory for foam manufacturing and converting.
International Expansion and New Challenges in the Late 1990s
Sagging profits in 1994 and 1995 led British Vita to restructure operations and focus attention on strengthening operations. Vita faced declining demand in the cellular polymers division as furniture and bedding sales in Vita's major markets fell in the mid-1990s. In addition, increases in the prices of raw materials in the division affected Vita's bottom line. The fibers and fabrics group also faced similar difficulties, but fortunately for Vita, the industrial polymers group enjoyed increased demand due to stronger industrial and transport markets.
With economic conditions in its home country remaining poor, Vita turned to regions across eastern Europe to boost sales. Its foam operations in Poland, which commenced in 1994, continued to perform well, and in 1996 the company announced plans to expand plant capacity at its Polish Brzeg Dolny facility by 40 percent. While the company searched for strategic investments in Europe, it also divested itself of some underperforming and nonstrategic operations. With negative market conditions in Germany, Vita announced it would shut down its block-making facility in Wega, Germany, in 1996. Vita also chose to divest its share of Vita-Achter, a joint venture with the Viktor Achter Group that produced automotive fabrics. The company sold its Norman and Beddington mattress manufacturing businesses and closed the Oost unit in The Netherlands. Vita also chose to discontinue business in the molded polyether foams segment.
In addition to European expansion, Vita sought to grow internationally in the late 1990s. In 1996 Vita added to its U.S. holdings when it acquired the Olympic Products Division of Cone Mills Corp. for about US $40 million. Olympic, a leading supplier of foam and fiber products for the automotive, home furnishings, and industrial industries in the United States, had four plants in the Greensboro, North Carolina area and a plant in Tupelo, Mississippi. The following year Vita purchased Crest Foam Industries, also based in the United States. The company also explored investing in Asia and became involved in a joint partnership with Inoac Corp. of Japan.
1949:Norman Grimshaw forms Vitafoam Ltd.
1960:Vitafoam expands internationally.
1966:Company incorporates as British Vita Company Ltd.
1967:British Vita goes public.
1999:Company celebrates its 50th anniversary.
In 1998 British Vita invested a record £173.1 million in acquisitions. The company's industrial division was boosted by the acquisitions of Axipack, a French maker of polypropylene sheet, and Caleppio ILT Spa, a manufacturer of thermoplastic sheet based in Italy. Caleppio's products were geared toward the automotive and sanitaryware industries. Vita also added Hyperlast Ltd. and Doeflex PLC to its liquid polymer compounding division. Doeflex was the largest plastic sheet extruder in the United Kingdom and one of Vita's primary domestic competitors. The £65.9 million purchase included Doeflex's three facilities in England--Iridon Ltd., Plastech Extrusions Ltd., and Doeflex Sheet Ltd. Doeflex also owned the Belgian Horizon Industries NV and Perrite Plastic Compounds Ltd. Doeflex's compounding operations included Doeflex Vinyl Ltd. and Synlon Ltd. Among Vita's other 1998 acquisitions were JGP, a compounding company, and an additional 33.3 percent share of Spartech Corporation, which boosted Vita's stake to 44.3 percent. Thanks in large part to the aggressive acquisition strategy, Vita's 1998 sales rose six percent over 1997 to reach £853 million.
Vita spent 1999 integrating its numerous acquisitions into its extensive family of operations. Still, the company looked forward to further strategic acquisitions. Jim Mercer, Vita's chief executive since 1996, told AFX News in early 1999, 'Over recent months, we have embarked on a major acquisitions programme--our biggest and most ambitious ever. Our initial position this year will be to bed them down. But our radar is still switched on.' In September Vita acquired Elian SA, a supplier of color concentrates used in specialist polymer compounding, for about £16.9 million. The end markets served by Elian included cosmetics, automotive, toys, and packaging. Vita strengthened operations in its fiber division by first investing £5 million toward a new plant for its Libeltex subsidiary. The new facility was earmarked for producing hygiene products, a quickly growing segment involving such markets as incontinence, diaper, and feminine care. In early 2000 Vita purchased Texidel Group, a French company that manufactured technical nonwoven fibers for the automotive and technical industries.
Vita announced positive financial results for the first half of 1999. Overall sales grew 15 percent, buoyed by strong growth in France and the United States. The company appeared to have successfully refocused its operations and energies and looked toward the 21st century to continue its international expansion and sales growth. Vita planned to strengthen its three main divisions--foams, industrial, and fibers&mdashø provide innovative and technologically advanced products found in everyday goods such as vacuum cleaners, surgical gloves, diapers, and seat cushions.
Principal Subsidiaries: British Vita Investments Limited; Doeflex Industries Limited; Hyperlast Limited; Vitacom Limited; Vitafoam Limited; Caligen Foam Limited; Doeflex PLC; JGP Limited; Kay-Metzeler Limited; H.E. Mowbray & Company Limited; Plastech Limited; Silvergate Plastics Limited; The Rossendale Combining Company Limited; Vitafibres Limited; Vitamol Limited; Vita Industrial Polymers Limited; Vita Liquid Polymers Limited; Vita International Limited; Vita International Investments Limited; Vita Services Limited; Vita Thermoplastic Compounds Limited; Vita Thermoplastic Sheet Limited (Scotland); Vita-tex Limited; Axipack SA (France); Caligen Europe BV (Netherlands); Carolex SA (France); Deutsche Vita Polymere GmbH (Germany); Draka Interfoam BV (Netherlands); Gaillon SA (France); Horizon NV (Belgium); ICOA France SA; SA Isofel (Spain; 78.4%); Jackdaw Polymeres SA (France); Koepp AG (Germany; 94.25%); Krojcig Mebel Sp.z o.o (Poland; 51%); Libeltex AB (Sweden); Libeltex NV (Belgium); Libeltex SA (France); Metzeler Mousse SA (France); Metzeler Plastics GmbH (Germany); Metzeler Schaum GmbH (Germany); Morard Europe SA (France); Participation Moulinage du Plouy SAS (France); Pullflex SA (France); Radium Foam BV (Netherlands); Australia Vita Pty. Limited (Australia); Crest Foam Industries Incorporated (U.S.A.; 80%); RLA Polymers Pty. Limited (Australia); Vitafoam CA (Private) Limited (Zimbabwe); Vitafoam Incorporated (U.S.A.); CRF Services Limited (50%); Vita Cortex Holdings Limited (Ireland; 50%); Spartech Corporation (U.S.A.; 44%); Taki-Vita SAE (Egypt; 40%); Vitafoam Nigeria PLC (31%); Vitafoam Products Canada Limited (50%); Radium Latex GmbH (Germany); Royalite Plastics SRL (Italy); Tramico SA (France); UAB Vita Baltic International (Lithuania; 80); Veenendaal Schaumstoffwerk GmbH (Germany); Vitafoam Europe BV (Netherlands); Vita Polymers Denmark A/S; Vita Polymers Europe BV (Netherlands); Vita Polymers France SA; Vita Polymers Poland Sp.z o.o.
Principal Competitors: Carpenter Co.; E.I. du Pont de Nemours and Company; Foamex International Inc.