The Leeds-based business, whose services include supplying local authorities with wheelie bins and plastic recycling boxes, acquired Dyro Holdings, which trades as Powell Plastics and is based at a factory in Hull.
Dyro's turnover was 10.0m and profit before tax was 1.12m in 2009.
Straight has acquired the entire share capital of Dyro, which it says will strengthen the group's position in its core markets and also aid the group's future development.
The board believes that the addition of Dyro's manufacturing capability will allow the group to enhance overall profitability. Dyro's location in east Hull will also provide the group with a new UK distribution hub and a base for its growing exports business.
Dyro has been a supplier to Straight for a number of years.
During the last six months, trading between Straight and Dyro has increased following Straight's acquisition of Helesi's Bradford-based wheeled bin production equipment acquired in March 2010.
Dyro also has a proprietary injection moulding business which supplies shelving and storage products to the DIY sector.
Straight said these products were complementary to its garden and hardware business and cost saving and cross-selling synergies were expected.
Straight said it made "good progress" towards re-establishing the market share it enjoyed in wheeled bins prior to the closure of Helesi's UK factory in September 2009.
Chief executive Jonathan Straight said: "The evolution of Straight's business model into direct production further strengthens its position in its core market place and will act as a springboard for further vertical integration as well as future acquisitions.
"Our team has considerable experience in running manufacturing businesses at both board and management levels and this will aid the speedy integration of Dyro into the group.
"The board has plans to further develop its new Hull site in line with the strategic goals of the group."