PHOTO: Flexible approach – The new signage at the 21,000m² site in Mobeni, one of the largest in the industry in Durban, went up pronto. The more challenging task of rebuilding the extrusion business is now underway, with MCG appearing ready to back up its new venture with further investment and added manpower and skills

MCG has bought LR Plastics, the Durban film extrusion and bag-making business which had gone into business rescue towards the end of last year. The Mobeni-based company is now operating as MCG Flexibles.

MCG bought the assets of the company and has taken over the employment contracts of the employees who had not yet resigned.

MCG bought the assets of the company and the capital was used as a compromise to creditors. No debt comes with the transaction and the assets are unencumbered, said MCG managing director Ian Victor.

A Propco, with similar shareholders as MCG, bought the 21000m² property in Richard Carte Rd, Mobeni. This will ensure MCG Flexibles can trade without interruption, added Victor. LR built was then its new factory on the site in 2006 with further upgrades completed in 2011. It was at the time one of the most impressive sites in the industry.

Production at MCG Flexibles recommenced in June and the first 120 tons of product was sold just two weeks after the machines were restarted, added Victor.

LR was formerly one of SA’s most prestigious film manufacturers, and was regarded as such for many years. The company was built up by astute entrepreneur Dudley le Roux over the past 36 years and was known for its outstanding product quality.

“LR had all the relevant accreditation, including British food grade accreditation,” said Victor.

“The machines were well maintained and during our DD process, each machine was tested and found more than capable of supplying the same quality product to the market place as customers where accustomed to. LR has good equipment that can supply a variety of products, more than many competitors, into a wide market space.

“MCG is continuously looking for opportunity and with LR we feel we have a fantastic base to enter into the flexibles market and compete immediately with competitors. Furthermore, I believe that with LR exiting the market, a gap was created and although LR caused much pain for its customers, MCG Flexibles will be able to reassure old LR customers that we are able to offer them even more value once we gain their trust again.

“MCG, as you are well aware, is not shy to invest in its factories and we will take the same approach with LR once we have stabilised the company,” added Victor.

The majority of senior staff had left prior to the purchase, including all the former directors. The ops managers and operators who had remained on site during the business rescue process helped with the restart.

“There is a core of production, engineering and admin staff who are seriously motivated in making MCG Flexibles work. Garry Salkow is heading up the start-up team and we have old employees wanting to return on a continuous basis. MCG has and is engaging with many role players in the flexibles space to ensure we hit the ground running and not make the same mistakes as old LR did. MCG will use its market intelligence to win back market share, he added.

“The most challenging part is to regain customers’ trust and we are working at this with a new sales and marketing team,” added Victor.

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