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Agri-Industrial plans to expand in non-automotive fuel tanks

By: Michael Lauzon

August 30, 2012

FAIRFIELD, IOWA (Aug. 30, 1:15 p.m. ET) — Custom blow molder Agri-Industrial Plastics Co. is making room for continued expansion in the barrier fuel tank market.

Agri-Industrial bought an 80,000 square-foot building next door to its Fairfield blow molding operation. Agri-Industrial expects to complete the deal, for which terms were not disclosed, on Sept. 1.

Agri-Industrial is promoting use of six-layer, barrier plastic fuel tanks in non-automotive markets, said Mick Stielor, sales manager, in an interview.

“We have a number of new customers and new fuel tank configurations,” Stielow said. ”With additional [blow-molding] machines getting more customers will cause no concern about capacity constraints.”

“We planned to expand anyway and when this building became available it was a perfect fit,” Stielow explained by telephone from Fairfield.

Agri-Industrial will use about 68,000 square feet of the purchased building for warehousing. Moving warehouse space from its current plant will free up space in the 184,000-square-foot building and allow it to install two new Kautex multi-layer blow molding machines it ordered in November. The first machine has been tested in Germany and is on its way to Fairfield. The second will follow 4 to 6 weeks afterward.

Stielow said the purchased building eventually will house more production capacity as the company grows in fuel tank markets. Agri-Industrial will lease back 18,000 square feet of the purchased facility to its former owner, Hawthorne Direct, a full-service advertising agency in business for 26 years. Some of Hawthorne’s functions will be moved to its Los Angeles location.

Stielow said the owners of the privately held Agri-Industrial recognized several years ago the implications of tightening fuel emission regulations by the U.S. Environmental Protection Agency for non-automotive machinery. Agri-Industrial began investing in Kautex multi-layer blow molders to capitalize on expanding demand for barrier fuel tanks in lawn and garden, power sports, all-terrain vehicles, watercraft and myriad other products that run internal combustion engines from an attached fuel storage tank.

Agri-Industrial will have five multilayer Kautex machines when the new ones are delivered and 19 other Kautex industrial blow molders in Fairfield.

Stielow said both of the new multilayer machines will be in place well before the seasonal demand peak occurs for fuel tanks from February to June.

“The location is ideal as it allows us to keep all of our operations, warehousing and offices in one campus,” stated Agri-Industrial director of business development Lori Schaefer-Weaton in a news release.

Agri-Industrial now has more than 130 full-time employees. It boasts of 350 active molds.