Futura Plastics & Engineering Inc. fits Steele Capital Group Inc.'s picture of a profitable future. The 2-year-old investment firm has acquired an interest in Futura, a custom injection molder in Louisville, Ky., with annual sales of about $10 million in 1994. Terms were not disclosed.
Futura is the first step in Steele's long-term business plan of offering ``a diversified group of technologies and services'' to customers, said President Bob Steele, who has been looking at plastics firms for more than two years.
The German family retains an interestin Futura, with Sandy German continuing as president and chief executive officer; his sons, Robert and Ronald, remain as vice president and general manager, and vice president of sales, respectively. Bob Steele, of Cincinnati, is the company's new chief financial officer.
Futura's 60,000-square-foot plant in Louisville houses 24 injection presses and employs about 130 - a number it plans to increase, Sandy German said in a May 10 telephone interview.
The infusion of new capital will help pay for on-site toolbuilding capabilities - an investment Steele estimated at $400,000-$500,000 - including computer numerically controlled milling and lathes and electric discharge machining, to be installed by year's end. Right now Futura does its own tool repair, but outsources tooling. The toolroom will allow it to transfer a large percentage of that in-house, Steele said by phone.
Also on the agenda, both German and Steele said, is a new precision molding house to be located at another site. Although Futura does some close-tolerance work, it cut way back on that business several years ago when a major account moved to Connecticut.
``We're looking toward much more high-tech, high-speed precision molding,'' German said.
That operation's end markets will hinge on its customers - ``wherever we can make the penetration,'' he said. But they are likely to include such industries as medical products, appliances and business machines.
Whether Futura buys or starts a precision house will depend on the market, said Charles Reid, head of First Trends Business, the Cincinnati market analysis firm that helped Steele assess the buy. For now it plans to offer more assembly and secondary services to its existing customer base. In January it extended services to include product packaging for one customer, a major toy maker, German said.
The firm also is shopping for materials-handling and auto-mation equipment, and will upgrade computers to integrate manufacturing, inventory and accounting.
Besides toys, Futura custom molds parts for appliances and for the automotive aftermarket; point-of-purchase displays for greeting card companies; and environmental products, German said. It injection molds a carton from 100 percent regrind that carries 24 2-liter bottles.
The company primarily uses ABS, polypropylene, polyethylene, polycarbonate and nylon, he said. And, for one customer, it molds a line of industrial batteries of polysulfone, ``an extremely difficult material to work with,'' he said.
Its presses - more than half Cincinnati Milacrons, and ``a smattering of others'' - have clamping forces of 85-750 tons, with the majority at 375, 500 and 700 tons, German said. He said the company is well on its way to ISO 9001 certification.
``Demand for high-quality contract injection molding has grown rapidly over the past five years,'' he said. ``With an investor we are able to expand services, complete ISO 9000 status and grow in sales.''
He said Futura's sales and profit have doubled during the past five years. Sales grew from $8 million to $10 million between 1991 and 1994, according to data Futura previously provided to Plastics News. German said he expects sales to double in the next five years.
The company also owns an interest in a 20,000-square-foot assembly plant employing 13 outside Louisville, with annual sales of about $1 million, Reid said.
Reid called Futura ``an im-portant fit'' for Steele, since the firm's first plastics acquisition is a foundation for those to come.
In 1993 First Trends and Steele began looking at the plastics market to see where it was headed and what its needs were - or ``what big companies were asking for,'' in terms of products and technologies, Reid said. They found more and more plastics projects cropping up within the international market and among Fortune 500 firms. Steele, via Futura and other potential acquisitions or partnerships, is creating itself to coordinate such projects, connecting with customers early on to take them through product development, design, tooling and production.
``Steele has a tremendous base with existing management [at Futura]. Without that, it wouldn't happen. It's the perfect opportunity to expand,'' Reid said.
