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Uponor North America invests $15.7 million in PEX

By: Michael Lauzon

April 26, 2013

APPLE VALLEY, MINN. -- New applications and economic recovery in traditional markets have encouraged Uponor North America to expand its headquarters in Apple Valley.

Parent Uponor Corp., based in Vantaa, Finland, has approved $15.7 million in capital improvements in North America to increase production capacity of cross-linked polyethylene tubing, according to Uponor North America President Bill  Gray.

The expansion includes adding more than 17,500 square feet at Apple Valley, bringing total space to 230,000 square feet by the end of the year.

“We’re pretty busy over here,” brand management director Ingrid Mattsson said in a telephone interview. “The housing industry is doing better. We’ve become very focused and strategic in our plan.”

The residential market is improving and commercial plumbing is opening up new opportunities, according to the company. “It just feels like things are moving well. We want to be sure we can keep up with demand,” Mattsson said.

PEX tubing is gaining ground in plumbing, fire sprinkler and radiant floor heating and cooling systems, often opening up new design possibilities as the material replaces metals and other plastics used in conventional convection systems.

The firm practices what it preaches. In January Uponor opened a new headquarters in Vantaa that extensively uses PEX tubing in heating and cooling. The facility also takes advantage of geothermal energy for climate control.

“This is a way to walk the talk and demonstrate our commitment,” Uponor CEO Jyri Luomalski said in a news release announcing the new headquarters.

The North American expansion is unrelated to other Uponor corporate plans, Gray said via email.

A proposed merger between Uponor and the pipe business of Vaasa, Finland-based KWH Group Ltd. was set back by the Finnish Competition and Consumer Authority, which said it would significantly reduce competition in the country’s plastic pipe systems. The joint venture, to be called Uponor Infra Oy, would focus primarily on northern Europe, where pipe competition has been fierce, and be jointly owned by Uponor (55.3 percent) and KWH Group (44.7 percent). It would be consolidated under Uponor’s infrastructure solutions business segment, which focuses on storm water and sewer systems.

The firms said the venture is aimed at improving efficiency and profitability, and reflects the mutual interest of both companies to stay in the pipe systems business, which has been slowed by the recession. The final decision now rests before Finland’s Market Court.

Uponor’s infrastructure solutions unit generated 2012 sales of 149 million euros ($191 million). The operations employ 516 and include two factories in Finland and one in Sweden.

KWH Pipe generated 2011 sales of 234 million euros ($303 million). Operations employ 1,238, and include three plants in Finland, two each in Denmark and Canada and four other factories in Sweden, Poland, the Czech Republic and Thailand.

“The industry landscape in this business segment in Finland and other Nordic markets has changed remarkably over the past several years, due to international and specialized domestic players having entered the market,” Uponor President and CEO Jyri Luomakoski said in a news release. “At the same time demand has suffered as a result of a prolonged global crisis.”

KWH Group President and CEO Peter Höglund said the newly structured pipe business would have better capacity utilization and a better chance at sustainable development.

Uponor and KWH hope to continue with the merger and could have a final decision May 25.

Uponor’s expansion in Minnesota will be its fifth at the operation, which opened in 1990. The facility houses production, corporate offices and a training center called Uponor Academy.

“We are projecting substantial growth for our PEX product in the commercial and residential markets,” Gray said in a news release.

Uponor employs nearly 500 in North America and expects to add more staff in the next year and a half.