A company formed to acquire and consolidate plastics manufacturers operating in niche sectors has floated on AIM. The initial public offering (IPO) raised £16.2 million for Plastics Capital, most of which will be used to pay off debt, and the balance to support further acquisitions.

A company formed to acquire and consolidate plastics manufacturers operating in niche sectors has floated on AIM. The initial public offering (IPO) raised £16.2 million for Plastics Capital, which intends to use most of the money to pay off debt, and the balance to support further acquisitions.

The group, which consists of three operating businesses based across the UK, made its first acquisition in November 2004 with an integrated finance package from Investec Growth & Acquisition Finance. The IPO enables Investec to exit its minority equity position in the company with an IRR of 45 per cent.

Chairman of Plastics Capital Faisal Rahmatallah tells GrowthBusiness: ‘The plastics sector is growing at three or four per cent a year, but some segments of it are growing much faster than the average, such as the development of more advanced polymers.’

The company, which has an assembly plant in Thailand in addition to five factories in the UK, sees cheaper manufacturing bases in the Far East as an opportunity rather than a threat, Rahmatallah adds.

‘The areas we work in are too small and technically sophisticated to warrant attention [from China],’ he says. ‘There will be some migration of production to China, but that’s something we can take advantage of where appropriate to achieve growth.’