CONCORD, ONTARIO - Automotive parts manufacturer Decoma International Inc. said it expects to spend more than C$20 million (US$14.2 million) on new injection molding machines during the next few years. Press purchases will include eight to 10 machines with clamping forces of 1,500-2,000 tons to convert a current paint shop to a molding/painting facility, Decoma President Alan Power said in a Jan. 20 interview at the firm's Concord headquarters.
Power said Decoma is on the verge of ordering a 4,000-tonner, one of about six 3,000- to 4,000-ton presses to be purchased during the next two years ``to support growth in our fascias business.'' The firm needs large presses ``because automotive fascias are getting bigger with parts consolidation.''
Other machinery purchases probably will include about six 500- to 1,500-ton presses.
Power did not disclose suppliers in the firm's planned expansion program because negotiations are still under way. Its current largest molding machines are Klockner Windsor models. Its smaller presses are from a variety of suppliers, most recently Engel Canada Inc. Decoma now operates more than 68 presses.
Decoma will add molding capability to its Plastcoat painting facility in Mississauga, Ontario, beginning in April, Power said. By late summer, Plastcoat should have four large presses to mold rocker moldings, cladding and other auto parts.
He said Decoma needs extra molding capacity because it is picking up new auto parts contracts and it expects automakers to convert more fascias from reaction injection molded plastics to injection molded thermoplastic polyolefins.
Two of Decoma's seven plants make RIM fascias.
Power estimated Decoma's plastic molding sales at about C$600 million (US$445.6 million) for the year ended July 31, up from C$505 million (US$402.2 million) in the previous year when it ranked third-largest among North America's custom injection molders in Plastics News' annual survey of such firms.
Parent firm Magna International Inc. of Markham, Ontario, had about a 37 percent increase in sales to C$3.6 billion (US$2.7 billion) in its last fiscal year. Magna attributed the growth to a 10 percent rise in North American vehicle production, an 8 percent increase in market share, higher tooling sales and new sales from acquisitions in Europe.
Power said Decoma's growth in the current fiscal year is similar to recent years. The company's sales benefit from automakers converting exterior trim from metal to plastic.
Magna predicts the auto industry will perform well again this year. Power said any slowdown in auto sales caused by higher interest rates ``is potentially good news.''
``The [auto] industry as a whole is having trouble keeping up with demand,'' Power said. ``Any softening should simply stretch out the growth part of the cycle.''
Winter is traditionally a slow time for auto sales and Power said auto producers have taken a lot of overtime work out of their schedules.
Power said Decoma looks for automotive molding requiring presses of 500 tons or larger and including value-added work such as painting and assembly. It sources small auto parts for assemblies, mainly from molders near its Canadian and U.S. plants.
Decoma is Magna's most plastics-intensive subsidiary. Decoma's overall sales for the past fiscal year were about C$850 million (US$631.3 million).