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SO PAULO, BRAZIL — Already a leading local supplier of beverage caps, Brazilian-based Tapon Corona Metal-Plastico Ltda. is diversifying in two related areas: PET preforms and bottles, and high density polyethylene pallets.

In PET, the company has had a partnership since late 1996 with Johnson Controls Inc.'s Plastics Container Division to injection mold preforms. Although JCI was recently bought by Schmalbach-Lubeca AG of Ratingen, Germany, the agreement continues. On the second front, Tapon Corona has been working on a joint venture with Nucon Corp. to produce Bulk-Pal pallets in Brazil by July. Such pallets will be destined for the beverage industry, among others.

The deal with JCI involved the acquisition of three Husky injection machines, in addition to the one the firm already possesses, amplifying its capacity from 6 million to 25 million preforms per month. The companies invested US$10 million in the project. Other terms were not released.

The machines were installed in February and March at Tapon Corona's PET packaging unit in Louveira, 40 miles from SÌo Paulo. They supply the soft drink, mineral water and edible oil segments. The Louveira plant is also equipped with six PET blow molding machines that manufacture 16 million flasks and bottles per month, processing part of the preforms produced at the same facility. The 100-employee industrial unit provides packaging for cosmetics, medicine and cleaning products, as well as for soft drinks, water and edible oil.

Recently, Tapon Corona bought a single-stage Aoki machine, which is about to be installed in the factory. The equipment can produce 1.5 million bottles per month and was displayed at Aoki's booth during Brasilplast '97. The Louveira facility also molds plastic closures. For now the partnership with JCI is valid only for the preform lines.

``The objective of this association is for it to grow together with the market,'' said Francisco Xavier Lopes Zapata, Tapon Corona's president.

In the pallets area, the joint venture with Deerfield, Ill.-based Nucon Corp. included an investment of about $4 million to build a 32,400-square-foot plant adjacent to the PET unit and purchase a Springfield Johnson Controls' structural foam injection machine, to mold 200,000-350,000 pallets per year.

Tapon Corona will control 60 percent of the business. Nucon will transfer the pallet molding technology and the molds to produce the pallets. In the beginning, the pieces will be made of virgin and off-grade high density PE.

``Nucon's technology, the machine and also the application permit the use of recycled HDPE. We'll do that as soon as we find a raw material that offers a good price-quality ratio,'' said Liviu Schwarz, business development assistant at Tapon Corona.

Tapon Corona is affiliated with Mexico's Zapata Group. In Brazil, its headquarters is in SÌo Paulo.