Viskase Holdings VISK

Viskase Holdings, Inc. operates in the casing product segment of the food industry as a worldwide leader in the production and sale of cellulosic, fibrous and plastic casings for the processed meat and poultry industry. The company runs 8 significant manufacturing facilities across North America, Europe, South America and Asia. Its cellulose, fibrous and plastic casing extrusion operations are capital intensive and characterized by high fixed costs, while finishing operations are labor intensive. In addition to casing production, Viskase provides value added support services such as technical assistance, product development and logistics to its customers. The company’s business strategy focuses on improving operational efficiencies, product quality and throughput by upgrading existing production facilities and adding resources in high growth markets through new capital investments. Viskase also pursues cost savings initiatives that reduce extrusion, shirring and printing waste and seeks entry into new value added lines of business.

Viskase generates revenue primarily from the sale of its 3 core product lines: cellulosic casings, fibrous casings and plastic casings used by processed meat and poultry manufacturers. The company also earns income from value added services that help customers improve processing efficiency and product quality. Sales are driven by consumer demand for meat products, the volume of casings ordered by meat processors and the prevailing average selling prices, which fluctuate with raw material costs, supply and demand dynamics and product mix. Viskase periodically offers promotional incentives including customer rebates, temporary price reductions, off invoice discounts and other trade activities, and treats credits or discounts for non conforming products as a reduction of the sales price at the time of sale. These promotional activities, credits and discounts can materially impact net revenue and changes in them may affect period over period results.

Viskase holds a strong position in the global casing market, ranking among the 2 largest producers of non edible cellulosic casings and among the 3 largest manufacturers of non edible fibrous casings worldwide. Its competitive advantages stem from a large scale manufacturing footprint, continuous improvement initiatives that enhance operational efficiency and product quality, and a focus on cost savings programs that reduce extrusion, shirring and printing waste. The company’s ability to operate at near capacity in existing facilities and to invest in high growth markets further supports its leadership stance. Viskase is one of the 2 largest worldwide producers of non edible cellulosic casings for processed meats and one of the 3 largest manufacturers of non edible fibrous casings. The firm regularly evaluates capacity and projected market demand and believes current and planned cellulosic production capacity is in balance with global demand.

The company serves processed meat and poultry manufacturers, ranging from large multinational corporations to regional processors, as well as various value added service recipients in the consumer products sector. While the filing does not disclose specific customer names, it notes that Viskase supplies some of the world’s largest global consumer products companies. These customers rely on Viskase for consistent product quality, technical support and timely delivery of casings that meet their processing specifications. The company’s long standing relationships with meat processors enable it to understand evolving consumer preferences and to adapt its product offerings accordingly.