WHEATON, ILL. - After absorbing years of losses, plastic packager CFI Industries Inc. is hunting for low-cost manufacturing sites away from Chicago. CFI, two-thirds controlled by investor Sam Zell, recently built a factory in Enniskillen, Northern Ireland, and is close to picking sites in Puerto Rico and Texas.
Together, the leased plants will enable CFI's main Plastofilm Industries Inc. subsidiary to double the production capacity of the company, which has manufacturing operations at its headquarters in west suburban Wheaton and in Sparks, Nev.
Plastofilm operates a total of 20 thin-gauge and regular extrusion lines in the Wheaton and Sparks plants, processing about 15 million pounds of resin per year, according to Richard Partlow, vice president for sales and marketing.
``We will be installing six Sencor lines at the Irish plant, and that will increase our production about 50 percent,'' he said.
The company is still negotiating for the Puerto Rican and Texas sites, but the cost of setting up the Irish operation will be about $3 million to $4 million, he said.
The company thermoforms medical, personal-care and electronic packaging, and ranked 20th in Plastics News' 1995 survey of North American thermoformers, with $28.7 million in sales.
``We're already planning on transferring some of the work we do in Wheaton to Northern Ireland,'' said Robert George, CFI's president and chief executive officer. ``The plant in Puerto Rico, in particular, will give us a real cost advantage in pro-duction. Most of the products we make there will be redistributed back to the U.S. mainland.''
Observers estimate that wages at a Puerto Rico facility are likely to be about 50 percent of those at the Wheaton plant.
The current expansion seemed unlikely when George, a former management consultant, arrived as CEO in June 1994. The company had been losing money for five years, and it faced an expensive environmental cleanup at its Wheaton site.
George, 48, has turned CFI around. He cut the company's work force by about 70 employees, to 250. He ordered manufacturing schedules revamped, money-losing lines dropped and development work redirected to higher-margin products.
It helped that CFI's blue-chip customer roster-including Abbott Laboratories and Baxter International Inc.-was experiencing robust demand for products that Plastofilm packages.
Earnings in the fiscal year ended June 30 totaled $1.8 million, or 86 cents a share, reversing the year-earlier loss of $842,000, or 42 cents a share. Revenues rose 9 percent to $31.3 million.
In the first quarter, ended Sept. 30, revenues advanced 10 percent, compared with the year-earlier period, and profit jumped threefold to $362,000, or 16 cents a share. CFI's stock, which traded at $2.75 the day George arrived, was quoted recently at about $6.25.
``We feel we're very profitable now. We're meeting or exceeding each of our '96 budget estimates,'' George said before CFI's recent annual meeting.
His associates aren't surprised by the changes.
Al Ulsrud, president of resort developer Kingbrook Development Corp. in Buffalo, N.Y., remembers George as a troubleshooter at Dynalectron Corp. in McLean, Va., where both worked through 1988.
``At that company, Bob was tossed into divisions that had all kinds of problems and, without exception, he delivered results,'' Ulsrud recalled.
Even Plastofilm's environmental problems are near resolution.
A decade ago, cleaning fluids contaminated soil around the Wheaton plant. CFI has reserved $1.1 million for a cleanup, but a plan approved by the U.S. Environmental Protection Agency may cost only $400,000.
Plastics News reporter Tom Ford contributed to this story.