As part of its continued aggressive growth into compounding, H. Heller & Co. has agreed to buy a 50 million-pound-per-year polyethylene compounding facility from Chevron Corp. Heller expects to close its purchase by the end of September, and it plans to expand the facility by the end of 1996. Terms and financial plans for the expansion were not disclosed.
Heller is buying Chevron's precolored PE resin facility in Channel View, Texas, including 17 acres, buildings with about100,000 square feet of space, and silo facilities for blending and loading resins into railroad cars and trucks.
The plant has four compounding lines that have produced fractional-melt and medium-molecular-weight, high density PE and some blended and pelletized low density PE resins for Chevron. Its primary products were orange and black precolored resins for pipe applications.
In an Aug. 16 telephone interview from his Houston office, Peter Toohy, sales manager for polyolefins for Chevron, said Chevron of Houston considered the Channel View plant underutilized - operating at a rate of about one-third of its capacity in recent years - and not a part of its strategic assets.
Lloyd Heller said what was underutilized for Chevron fit his company's plans. Heller spoke in a telephone interview Aug. 16 from H. Heller & Co.'s headquarters in White Plains, N.Y.
The facility will be operated as Gulf Performance Polymers Inc., a sister company to H. Heller & Co. and Heller Performance Polymers Inc. of Visalia, Calif. The companies have common owners, but there are no other legal or business ties between them, Heller said.
Heller said the facility will extend the reach of his plant in California and will allow it to become more competitive in several product lines.
Heller hopes to gain a competitive advantage from the new facility through its proximity to Midwestern and East Coast customers. Also, he said he hopes the plant will help his company penetrate those markets and markets in Mexico more deeply than the California plant can do on its own.
The plant will continue to produce colored HDPE compounds for pipe applications and LDPE products, according to Heller. It has a supply contract with Chevron, but it will not process Chevron products exclusively, he said.
Heller said he intends to make toll-compounded products and proprietary products at the Channel View facility, and to expand its offerings to compounded polypropylene and polystyrene resins, and to color concentrates.
To expand its product portfolio, Heller said he intends to install two or three compounding lines within a year.
By the end of next year, Heller said he wants the facility to have capacity to produce 80 million pounds of resin a year.