A letter of intent with Mitsubishi Chemical Corp. is the latest move in the fast-evolving world of Fiberite Inc., a supplier of advanced composite materials and molding compounds. ``We believe in composites,'' James Ashton, Fiberite chief executive officer, told customers at a private March 27 luncheon in Anaheim, Calif. ``We also believe further industry consolidation will be healthy for us and our customers, and we are not done.''
Two days later, Fiberite and Mitsubishi announced plans to manufacture seismic retrofit and structural reinforcement materials jointly.
Production will occur in Fiber-ite's Greenville, Texas, plant, and Mitsubishi will use the preimpregnated materials in tackling the infrastructure market in North America and Europe. Fiberite's board is expected to approve the 10-year agreement this spring.
Tokyo-based Mitsubishi supplies construction-grade prepregs for seismic retrofits and structural reinforcements under the trademark Replark, and has completed hundreds of projects, principally in Japan. The company was formed in 1994 through the merger of Mitsubishi Kasei Corp. and Mitsubishi Petroleum Co. Ltd. and reported profit of $34.1 million on sales of $15.1 billion for the year ended March 31, 1995.
A structural materials business that Fiberite established in Chigasaki, Japan, in 1985 was sold in 1992 to Mitsubishi Kasei with a sales royalty accruing to Fiberite.
The expanded Fiberite-Mitsu-bishi relationship will focus on qualifying Replark to column-wrapping specifications of the California Transportation Depart-ment and other states and municipalities. A team of Mitsubishi's composites materials unit, Obay-ashi Corp. and Sumitomo Corp. presented its qualifications with Fiberite at a December kickoff meeting at Aerospace Corp. in El Segundo, Calif.
In his remarks, Ashton recounted how and why a partnership of DLJ Merchant Banking and Carlisle Enterprises LP acquired Tempe, Ariz.-based Fiberite from Imperial Chemical Industries plc in October and hired him as chief executive officer.
``DLJ and Carlisle buy companies as [leveraged buyouts], grow value, pay down debt and intend to sell again, typically in four to five years,'' Ashton said. The incentives were Fiberite's ``good growth prospects'' and availability ``at a fair price'' (about $115 million).
He discussed Fiberite's pending deals to acquire Hercules Inc.'s composite products division and Sofremi SA's bulk molding compounding subsidiary Simmaco and to license Ligustica SA's technology for an epoxy-preimpregnated, foam-core material. Earlier, Fiberite had acquired British Petroleum's U.S. Poly-meric products unit.
Ashton said Fiberite intends to improve internal and external quality attributes, reduce lead times and ``continue to develop, and to bring to the marketplace, a steady stream of new and improved products.''
He advocates ``partnering with our customers and our suppliers to find ways to improve all along the food chain of value adding.''
Ashton expects more industry changes.