German vinyl auto-trim supplier Benecke-Kaliko AG will establish a U.S. production base by acquiring a minority stake in Sandusky Vinyl Products Corp. in Sandusky, Ohio. Sandusky Vinyl will pick up new business later this year when Benecke transfers some production from Germany, according to Kevin Givens, Sandusky Vinyl's vice president of administration. Sandusky Vinyl is investing $7 million in new vinyl coating and post-embossing lines that will allow Benecke to replace some of its exports to North America. Givens said the new lines should be running by the end of the year.
Officials of the two companies did not disclose terms of the deal, which they expect to complete by the end of April. Givens said Benecke will have the right to increase gradually its ``relatively small'' initial stake in Sandusky Vinyl, but he stressed the German firm still would remain a minority partner in the joint venture. Benecke's head office is in Eislin-gen, Germany.
The U.S. joint venture will help offset currency-rate fluctuations and allow Benecke to ``respond to the market demand for local production capabilities,'' Benecke Chairman Manfred Wennemer said in a news release.
Sandusky Vinyl's investment in new machinery will allow Benecke to transfer technology and production to the Sandusky plant, said Dan McNulty, vice president of North American operations for its U.S. subsidiary, Benecke-Kaliko Corp., in Troy, Mich.
McNulty's operation will move its head office to Farmington Hills, Mich., where Sandusky Vinyl has a sales office.
Givens said Sandusky Vinyl's sales last year were more than
$60 million. Benecke's total sales were $430 million. Its plants in Eislingen and Han-over, Germany, export around the world. Auto interior trim is its major market but it also makes vinyl products for furniture, book bindings and other markets.
Benecke's current North American customers include interior systems suppliers for Ford Motor Co. and Volks-wagen of America Inc. Officials did not disclose North Ameri-can sales. Sandusky Vinyl mainly sells to interior systems suppliers to Chrysler Corp., General Motors Corp., Ford and, to a lesser degree, U.S. transplants.
It also supplies vinyl products to construction, transportation and marine industries. One of its customers is Seal Dry USA Inc., a Little Rock, Ark., producer of single-ply roofing that is owned by Eastar Inc., Sandusky Vinyl's parent.
Benecke's thermoformable, embossed vinyl technology will be a new product area for Sandusky Vinyl, Givens said. The partners will share their expertise in a range of production and finishing technologies, including expanded vinyl, thermoplastic polyolefin alternatives to vinyl skins, and extrusion.
Eastar of Sandusky, is a holding firm that bought Sandusky Vinyl from Chrysler in 1992. Since then Sandusky Vinyl invested more than $15 million to expand and up-grade. Its sales have doubled and employment grew by 110 to 250. It has a large cast line, a calender line, three embossing lines and an extrusion line.