NILES, MICH. - Blue Chip Rubber & Plastics Inc. will be among the newest auto parts suppliers once it starts production in early March. The Niles-based firm, owned by Roger Horning and Larry Nelson, will employ three workers in the extrusion of rubber and thermoplastic elastomer custom profiles at a new, 17,500-square-foot building. The partners are spending $2.5 million to construct the facility, start the operation and buy equipment.
That machinery consists of two extruders from Crompton & Knowles Corp.'s Davis-Standard Division, along with curing systems and other downstream equipment supplied by Extrusion Services Inc.
Blue Chip plans to begin production March 1.
``But there's a lot of work to be done between now and then,'' said Horning, the firm's president.
Nelson will serve as the company's vice president and financial officer.
Based on business already lined up, the pair expects about 50 percent of Blue Chip's initial sales to be in the automotive sector. The balance will go to customers in a wide range of businesses, including appliances, general industrial and construction.
In the auto sector, Blue Chip will make parts for first- and second-tier suppliers. It makes little sense to try to supply auto-makers directly since they are thinning their ranks of Tier 1 vendors, Horning said.
The company will not make molded parts initially, but Blue Chip does have reciprocal agreements with several rubber molders. The firm will refer molding requests to those companies, while the manufacturers will pass their extrusion inquiries on to Blue Chip.
The partners expect to plan Blue Chip's growth as carefully as they planned its launch.
``We're going to do it methodically,'' Horning said.
He and Nelson are veterans of the rubber and plastics industry and have known each other for several years. After working for various companies, each knew he was ready for a change.
``We just decided it was high time that we do it ourselves,'' Horning said.
The two men spent about 11/2 years planning Blue Chip, investigating the right site and equipment.
They chose the Niles location because it is in a new industrial park in southwestern Michigan, close to major interstates and the South Bend, Ind., airport. Part of the time was taken up waiting for governmental approval for certain grants and other economic development incentives, according to Horning.
The partners said they also took their time searching for the most technologically advanced equipment.
While Horning and Nelson are busy with the details of starting up a factory, they also are looking ahead. The partners are talking to consultants to begin preparing for ISO 9001 certification.
``We want that badly,'' the president said. ``It's not only an important selling tool, but it's also getting with the times.''
They are also working on an agreement with a local college that is setting up a rubber and plastics campus at the industrial park. Blue Chip employees will be able to earn credits through the college, while students will get hands-on manufacturing experience at the plant.
Horning declined to reveal sales projections for Blue Chip. He and Nelson, however, expect the business to grow - their site in Niles includes seven acres.
``We can expand at will, and we designed the building as such,'' Horning said.