The for sale sign has been erected over all of the non-core UK assets of British Alcan Aluminium, according to a City source. BAA is wholly owned by Alcan Aluminium of Canada.
The source said that the Canadian parent was looking to concentrate on aluminium smelting, and off-load the counter-cyclical business.
There are four non-core divisions at British Alcan. They are Luxfer, which makes high pressure aluminium gas cylinders; Consumer Products, best known for making bin liners and Bacofoil oven-wrap; MEL, which produces magnesium products, and a chemicals business.
British Alcan declined to comment. The four divisions are understood to turn over more than £450m a year, and are thought to be worth more than £100m.
It is also understood that the Canadian parent is insisting that the sale is concluded as quickly as possible by disposing of the four divisions as a job lot. The closing date for the first round of tenders is believed to be at the end of this week, and, the source added, has attracted interest from venture capital groups which include Midland Private Equity.
The sale would enable Alcan to take advantage of the sharp recovery in aluminium prices, which collapsed in the early 1990s. The London Metal Exchange three-month price has risen from an all-time low in real terms of $1,040 a ton to $1,977 at the end of 1994.
British Alcan last week reported a pre-tax profit of £30.9m for 1994, a stark contrast to the £22.7m loss incurred in the previous year. Group turnover advanced from £745m to £853m. Alcan Smelting, in particular, benefited strongly from the rising price of aluminium.
Such is the growing demand for aluminium that British Alcan last year tried unsuccessfully to buy the North East Regional Coal Company, which would have enabled it to return idle smelter capacity to production.
John Bridgeman, managing director, last week confidently predicted: "The outlook for 1995 is better than for any year since 1989. With economic recovery, we can expect further substantial improvements in profitability in 1995."Reuse content