Climax acquires Missouri company

LOWVILLE — Climax Manufacturing Co. has acquired a Missouri packaging company in hopes of expanding its markets and business.

Climax purchased the assets and customer list of St. Joseph Packaging Inc. and will operate the company's plant in St. Joseph, Mo., through an affiliated company called Climax Packaging Inc. Terms of the acquisition, which was completed Friday, were not disclosed.

"We're not abandoning our roots," said Patrick J. Purdy, Climax's president and chief executive officer. "This is part of a long-term strategic plan that will allow our company to grow."

St. Joseph Packaging, a family-owned company founded in 1905, manufactures boxes for retail stores and industrial packaging for candies, pharmaceuticals, animal products and other industries.

"They do similar to what we do," Mr. Purdy said.

However, St. Joseph's offset printing equipment is better suited for small, more detailed orders, while the flexographic equipment here is more efficient with larger orders, he said.

"We would sell as one company and determine which site is most efficient," Mr. Purdy said.

The majority of the 80 to 85 employees at the Missouri plant will be rehired by the new corporation, although several will not be retained, he said. No specific job figures were provided.

"We hope to grow that business, too," Mr. Purdy said. "Hopefully, both sites have more employees two years from now."

Climax has already negotiated a labor contract with union workers at the Missouri plant, said Jill E. Boliver, the company's human resources director.

Climax employs a total of 240 full-time workers at its headquarters and packaging plant here and at its paperboard division in West Carthage, which produces uncoated recycled board.

The company in March cut 17 hourly positions at its Lowville plant due to the downturn in the retail market. However, Mr. Purdy said the West Carthage paper-making plant has been doing well, and company officials are planning to add a fourth shift of about 10 full-time workers shortly.

Climax also was recently awarded an $8 million-per-year contract with Walmart to produce doughnut boxes for its stores throughout the northern half of the country.

"We'll be in production by the end of November," Mr. Purdy said.

While Climax's packaging business is now about 75 percent clothing boxes and 25 percent food boxes, the company is looking to increase its share of the supermarket business, which is more stable and much less seasonal, he said.

The company already holds about 60 percent of the Northeast supermarket box share, but the St. Joseph acquisition should help break into the Midwestern market, Mr. Purdy said.

"We think the Midwest is really the best place for us to be growing," he said.

Climax in May 2008 was sold by the Hirschey family to Climax Acquisition LLC, a group led by a pair of investment firms and members of company management. The deal, using $6.9 million from a state pension program that invests in private companies, was touted as a means to boost the company's capital investment and growth plan, ultimately leading to more jobs.

Despite the poor economic conditions, Climax recently completed a $600,000 energy savings project at the West Carthage plant that reclaims much of the heat from smokestacks for use to heat water, Mr. Purdy said. A $350,000 project at Lowville to improve the quality of food-box windows is slated for December, he said.