Clariant Corp. of Charlotte, N.C., has purchased Bay Resins, a compounder based in Millington, Md., that specializes in making proprietary grades of engineered plastic resins. Terms of the acquisition were not disclosed, and the company said the acquisition included Bay Resin's existing management.
Clariant is the U.S. unit of Clariant Ltd., a 10-month-old, $2 billion company based in Muttenz, Switzerland, that traces its roots to Sandoz Chemical Co. Clariant also owns ReedSpectrum of Holden, Mass., a maker of custom, standard and stock color concentrates.
The acquisition of Bay Resins marks Clariant's first step into compounding, a business that the company intends to expand through several acquisitions planned for the next two years, according to Mike Smith, vice president of Clariant for Perfor-mance Plastics sector.
That unit includes Bay Resins and ReedSpectrum. Smith also is vice president and general manager of ReedSpectrum.
The company is planning to use Bay Resins' compounding technologies and color concentrate technology housed at Reed-Spectrum, as bases for a custom compounding business that eventually will encompass the globe, Smith said in an interview May 20 from his office in Holden.
Bay Resins provides small to medium-sized lots of custom-colored, engineering resins to pro-cessors. The automotive industry is its primary market, but it also supplies compounds to electrical and electronics, business machinery and equipment and other markets, Smith said.
Clariant Ltd. has established four global operational regions - Europe, North American Free Trade Agreement, Asia and South America, Smith said. Each region is establishing its own strategy to further the parent company's goal of being a global supplier.
In the NAFTA region, Smith said the strategy entails making several acquisitions of compounding facilities in the next 24 months.
Compounding contributes less than 10 percent of sales to Clariant Corp., Smith said. Within two years, he expects compounding to contribute 25-40 percent to the corporation's sales. The company does not disclose sales volumes of its operating units.
``We are not going to try to be a large-volume compounder,'' Smith said. ``Our niche is in small lots, at quantities of 30 million to 40 million pounds a year.''
With such lots, he expects Bay Resins and the other compounders Clariant may acquire to provide virgin and recycled resins for interior and under-the-hood applications in the automotive market, and for new and growing applications in the other markets the company serves.
Besides growth through acquisition, Smith said he expects Bay Resins and ReedSpectrum to gain considerable growth in the coming months internally.
ReedSpectrum has five manufacturing sites in the United States: Holden; Lawrenceville, Ga.; Minneapolis; Albion, Mich.; and Phoenix, and one manufacturing facility under construction at Naucalpan, Mexico. Bay Resins has one facility at Millington.