By: Frank Esposito
October 8, 2013
WEST CHICAGO, ILL. — If one Chinese plant is good for Bulk Molding Compounds Inc., then two should be better.
BMCI — the West Chicago-based firm than ranks as a leader in thermoset compound production — will open its second Site in China by the end of the year. The plant will be located in the Shanghai area in order to serve the firm’s customers in eastern China, particularly those in the automotive market.
BMCI has operated a plant in Dongguan since 2005, but “logistics were becoming an issue” in serving customers elsewhere in the country, Fran Zappitelli, BMCI’s executive vice president of technology, said in a recent interview at the firm’s headquarters.
In a phone interview, Mike Huff — CEO of BMCI’s parent firm Citadel Plastic Holdings Inc. — said that it was more likely that BMCI would build on a greenfield site rather than acquiring an existing facility in the Shanghai area for its second plant.
“China’s growing very nicely,” Huff added. “The core there is appliance and electrical/electronic, but we’re also doing well in automotive.”
Closer to home, BMCI has benefited in 2013 from a solid comeback in the North American auto sector. The firm’s materials are used in 95 percent of headlamp reflectors made on vehicles produced in North and South America.
“Auto sales are strong this year, Zappitelli said. “They gave us a boost last year and the year before, too.”
Auto and E/E are BMCI’s two largest markets, each with a 40 percent share. E/E material sales have been supported by an improving U.S. housing market in products such as circuit breakers used in both residential and industrial buildings. The firm also has benefited from shale oil and gas development by making materials used in “down-hole” shaft equipment.
In the last 12 months, BMCI has invested heavily in R&D, Zappitelli said, hiring six new employees in marketing and technology, as well as spending about $500,000 on new lab equipment.
“We want to increase our development pipeline, our close rate on new targets and our speed to market,” said Zappitelli, who joined BMCI in 1980 — two years after it opened its doors.
“We added commercial and technical talent,” Huff added. “It’s a major upgrade to our organization.”
BMCI employs 275 in total, including plants in Perrysburg, Ohio; Brazil; Germany; and two plants in Mexico.
Citadel — including BMCI — was acquired in early 2012 by Huntsman Gay Global Capital, a private equity firm co-founded by Plastics Hall of Famer Jon Huntsman Sr. NFL Hall of Fame quarterback Steve Young also is a partner in the group.
Huntsman Gay “has been wonderful to work with,” Huff said. “They have a good knowledge of the [plastics] industry from the Huntsman side.”
Citadel consists of BMCI and five other companies that were acquired by Chicago private equity firm Wind Point Capital Partners between 2007 and 2010. And although it’s been three years since the firm last expanded, Huff said more acquisitions could be in the firm’s future.
“We took time out from acquisition activity,” he added. “Now we’ll look at what adds value to the portfolio.”