Toronto-based CCL is making its first move into European label manufacturing, although its Custom Manufacturing division has plants in the UK.

Jarvis Porter has sold its plants in Leeds and Lewes, plus its Leeds headquarters building and its French and Dutch label companies.

Jarvis Porter said it had achieved a "considerable recovery" in its labels business, but that it would have needed "major capital investment" and a North American alliance due to customer consolidation. The sale emerged from initial partnership talks.

The labels operation worked primarily in the healthcare and consumer sectors. In the year to 28 February 2001 it made a 2.9m loss on sales of 23.3m. CCL shares customers such as Unilever with Jarvis Porter. The acquired firms will immediately trade under the CCL Label banner.

CCL Label president Geoff Martin was senior group vice president of worldwide converting and speciality tapes at Avery Dennison before joining the firm last year, and is familiar with the Jarvis Porter businesses. CCL Label Canada president Stuart Lang will move to Leeds to head the European, Canadian and Latin American businesses.

CCL Industries chief financial officer Steve Lancaster said his group had "every intention" of trading the firms in their present form. CCL Label has sales of 180m (C$400m). It has 12 sites across Canada, the US, Mexico and Puerto Rico.

Jarvis Porter will seek to retain its AIM listing and target acquisitions in other sectors. Its name will be changed to Grovebirch. Executive chairman Michael Maher said industrial and service industries were more likely. As for printing, "I would think not, but you never know", he said.

Maher said Jarvis Porter had "paid the price" of making acquisitions under previous management without investing to make them work. The purchase of Wace Corporate Packaging in October 1998 was "the end of the Jarvis Porter people had known for many years," he added. "It was a bad decision badly implemented."

Story by Gordon Carson