SSL seeks East European growth

London -- SSL International PLC is positioning itself to become a bigger player in Eastern Europe within the next two years. The condom manufacturer plans to buy a portion of Beleggingsmaatschappij Lemore B.V., a producer and major distributor of condom and medical disposable products throughout Eastern Europe and the Commonwealth of Independent States.

SSL did not give the exact percentage of the investment in BLBV, but a company official said it will be in the vicinity of 18 percent, which would put the price of the transaction at about $45 million (Euro 28 million). The deal is expected to close in April, and the company said it will confirm the actual percentage at that time.

London-based SSL has the option to acquire the remaining interest in the business within the next two years, a spokesman said, and also has an option to purchase Gainbridge Investments Ltd., another big distributor in the Eastern Europe and CIS regions. “The two businesses have an ownership overlap but are otherwise separate,” the spokesman said. “This will give SSL a foothold in the market. It's a big commercial opportunity because it gives the company much better distribution.”

While Netherlands-headquartered BLBV is primarily a supplier, it also makes condoms, including Contex, its main brand, he said.

The initial investment in BLBV is an important step for SSL, according to Chief Executive Garry Watts, because the growing Eastern Europe and CIS markets have the potential to become a significant part of the firm's business.

SSL closed its last European condom plant in early 2008 when it shut down a factory in Spain and transferred production to Asia. The company also is closing a technical centre in Cambridge, England. The firm has relocated Durex condom production from Rubi, located near Barcelona, to factories in Thailand and India.

Work at the Cambridge research and development center is being moved to manufacturing facilities in Thailand, India and Peterlee, England. The actions are aimed at the rationalization of SSL's condom manufacturing capacity, the spokesman said.

From Rubber & Plastics News (A Crain publication)