By: Mike McNulty
RUBBER & PLASTICS NEWS
May 5, 2014
LA PORTE, Ind. — Indiana quietly has become the go-to state for numerous foreign manufacturers, including a sizable number in or with ties to the plastics and rubber industries.
Indiana boasts about 110 businesses opened by corporations with headquarters in Japan, Germany and other countries. After they grow in the U.S. and become rooted in the state, many often expand and add employees, thanks partially to state and local incentives, an Indiana official said.
The latest to join the group is Norres Schlauchtechnik GmbH, a Gelsenkirchen, Germany-headquartered manufacturer of industrial hose, hose systems and other products.
It will spend about $1.87 million to purchase, renovate and equip its first North American factory in South Bend, Ind., creating more than 30 new jobs by 2018.
Making an even bigger splash in terms of investment, the Hanover, Germany-based Jaeger Group of Companies said it will invest about $4.5 million to expand subsidiary Jaeger-Unitek Sealing Solutions Inc. in La Porte by purchasing a new plant, adding machinery and expanding its work force in the process.
“We believe Indiana is the best place for this investment,” according to Marius Jaeger, managing director of the Jaeger Group. “The state is much stronger logistically and from an infrastructure point of view than many other parts of the country.”
Jaeger on growth path
Rubber and plastics extrusion component manufacturer Jaeger-Unitek has seen its sales triple over the last four years and is continuing to grow, President and CEO Mark S. Dilley said. By the end of 2016, it expects revenues to exceed $20 million. Its success helped prompt its decision to find a new factory that would give it sufficient room to expand.
It settled on a 137,000-sq.-ft. facility in La Porte that gave the firm an additional 50,000 square feet and purchased the plant, located near its existing site, according to Dilley. It's about 40 percent larger in terms of floor space than the firm's present factory, he said.
The Indiana Economic Development Corp., chaired by Gov. Michael Pence, offered Jaeger-Unitek up to $500,000 in conditional tax credits based on the company's job creation plans. The tax credits are performance-based; until the employees are hired, the firm is not eligible to claim incentives. La Porte also is offering incentives to the company.
Specializing in rubber and plastic extruded products, along with injection molded components used in window, door and sunroof assemblies for the auto industry, the company employs about 75 full-time employees at the La Porte factory and plans to add another 52 jobs at the site by 2016. Its parent has more than 1,000 employees spread across five countries.
Jaeger-Unitek presently is interviewing, hiring and training personnel for engineering, finance, production and maintenance posts at the plant in La Porte, which serves as the U.S. headquarters for the Jaeger North American Automotive Division.
Jaeger-Unitek also has plants in Minnesota and California that are part of its Agricultural Division.
The new plant, expected to be operational in August, will allow the firm to add another tri-durometer thermoplastic extrusion line and a thermoplastic injection molding press, Dilley said.
“We anticipate the need for another thermoplastic extrusion line early next year and potentially a dual-durometer rubber extrusion line as well,” to help handle its growing sales base.
Once the company takes over the new facility, it will close its lease at its current site and vacate the site, he said.
About 80 percent of the sales made from the La Porte facility are for North American auto parts suppliers, Dilley said. About 60 percent of its sales are to top Japanese-owned companies, 20 percent to German-owned businesses and 20 percent to U.S.-based firms, he said.
Founded in 2006 as Unitek Sealing Solutions, the Jaeger Group bought the company in 2010. Shortly thereafter, the La Porte operation doubled its employment, and the parent company invested more than $3 million to add rubber and thermoplastic molding, cryogenic deflashing and robotic inspection capabilities at the site.
Norres expands reach
Norres had been looking to set up an operation in North America for some time, and after an extensive search, it finally selected Indiana because of the “decisive advantages of location, especially its central geographical position that will make it an optimal transportation hub,” according to Norres Chairman Burkhard Mollen.
It found a 30,000-sq.-ft. plant sitting on 3.67 acres in South Bend that fit its present needs for its first U.S. subsidiary, he said. The company purchased the facility and has been renovating the building with plans to open it at the end of May.
The acquired factory and surrounding acreage give the company room for a medium-term expansion, if needed, he said.
It will operate as a subsidiary of Norres Schlauchtechnik and be called Norres North America Inc. In addition to logistics advantages, the company said Pence and a state agency came up with grants that made the South Bend site more attractive.
IEDC offered Norres up to $450,000 in conditional tax credits based on the company's job creation plans. Like the deal offered to Jaeger, the tax credits are performance-based, and the German hose manufacturer is not eligible for the incentives until new employees are hired.
It plans to begin hiring engineering, production, sales and administrative personnel in the near future, the firm said.
South Bend said it will consider additional tax abatement for the company.
Norres, which was founded in 1889 and employs about 250 globally, estimates it will have a work force of about 32 at the factory. It produces and sells specialized industrial hose for the pharmaceutical, food production and plastics markets.
It uses a variety of plastics as well as rubber and stainless steel.
It plans to make cable protection conduits and tube diffuser aeration systems, used for wastewater treatment, at the factory.
Pence toured the facility to help kick off Norres’ U.S. business plans.
Norres' goal in South Bend is to manufacture and supply an extensive technical hose product range and other goods to a wide ranging market in the U.S., according to Jens Schlueter, president of Norres North America.
That includes technical retailers, original equipment manufacturers and end consumers, he said.
In addition to its plants in Germany and the new one in South Bend, Norres has production facilities in China and the United Kingdom.