In a strategic move to serve a key customer better, Erie Plastics, a Corry, Pa., custom injection molding firm, plans to expand operations to New England. The company said it will open a division in Westborough, Mass., and begin production there by July for a unit of Gillette Corp.
``Since we're at full capacity at the Corry plant, we wanted to start establishing satellites closer to our customers,'' Paul C. Roche, president and chief executive officer, said in a telephone interview April 30. ``This is the first of several.''
About 99 percent of the parts
Erie produces are for packaging applications -containers, canisters, caps and closures for personal-care, household, and pharmaceutical products. Although its biggest customer, Procter & Gamble Co., is in Ohio, Erie chose Massachusetts to be closer to its other major customer, the personal-care division of Gillette Corp.
``The opportunity is there to grow with Gillette and better serve them when we're closer,'' Roche added. ``They are a strategic customer to us and it will give us a presence in the Northeast. That's where we ship to and it will save on shipping costs.''
For the past 10 years, Erie has supplied components for stick and gel deodorants for Gillette.
The account represents about 15 percent of Erie's business. Using the Gillette business as a basic platform upon which to build additional sales with both Gillette and other consumer products companies in the Northeast allows Erie to expand.
``We expect in the long term for our business to be 50-50 with Gillette and other business,'' Roche said.
Operating under the name Erie Plastics-Massachusetts, the company has leased a 72,000-square-foot building 30 miles west of Boston. The company has invested $4 million to $5 million in the expansion. It will ramp-up gradually to full-scale operations during the next six to 12 months.
Initially, six to eight injection molding machines will be in production with an anticipated 15-20 presses by the end of 1996. By the middle of 1997, Erie plans to have 20-24 presses. The machines will be Cincinnati Milacrons, Van Dorns and Engels.
According to Roche, the site has a projected employment of 40-60 and annual sales of $7 million to $10 million. Presses will be a combination of new equipment purchased in the next 12 months and existing injection machines transferred from the Corry plant to the Massachusetts plant. The transfer will begin in two weeks.
The hiring process is under way for the Massachusetts plant. Though Erie is allowing employees at the Corry plant to transfer to the Massachusetts plant, Roche anticipates the staff will consist mainly of new hires.
Massachusetts officials have been working in the Westborough area for the past several months preparing the site for full mechanical, engineering and aesthetic conversion to a modern injection molding packaging facility.
Roche is cautiously optimistic that most, if not all, of the work being transferred will be replaced by incremental sales volume from growth in existing product lines as well as additional manufacturing on new business.
``I'm more optimistic this week than I was last week that replacement work will be there,'' added Roche.
In addition to manufacturing, Erie anticipates the initiation of a satellite customer product innovation center to provide preliminary engineering, prototyping, modeling, product design, pre-product runs and the engineering of production tooling, according to a news release. This will be the second research and development satellite facility. The firm established the first one in Cin-cinnati in 1993.
Erie Plastics has been in business since 1960 and had been losing money as recently as 1987. Since that time, the company has seen sales rise.
During the past three years, sales have jumped $20 million, rising to $46.1 million in 1995, which earned the firm the No. 94 spot in Plastics News' recent ranking of North American injection molders.
The 180,000-square-foot plant at Corry is on 14 acres. It has 54 injection molding machines, including five in the research and development lab, with clamping forces of 200-500 tons, and are a mix of Engels, Van Dorns and Milacrons. As well, five new presses are on their way - four Engels and one Husky.
``We have $50 million in sales under one roof. That's bigger than a typical custom injection molder,'' Roche added.
Erie employs 270 full-time and 80 part-time employees for its seven-day, 24-hour operation. It serves about 15 Fortune 500 companies and produces parts for makers of laundry detergent, dishwashing liquid and shampoos.
The company also makes parts for pharmaceutical pill containers, food-dispensing equipment, industrial packaging and decorative panels.
