One proprietary molder is leaving Phoenix and another is moving in. Plastican Inc. in Leominster, Mass., announced it has entered into a definitive agreement with Ekco Group Inc. to purchase Ekco's manufacturing and distribution facility in Phoenix for $8.4 million - a figure provided by the Greater Phoenix Economic Development Council, but not confirmed by the companies.
Sale of the 104,000-square-foot facility is expected to be completed in January.
Russ Brillon, Plastican vice president for finance, said the move represents ``logical growth'' for the company, which is a major manufacturer of rigid packaging, curbside recycling bins and dairy cases. Its primary product is 1- to 6-gallon injection molded containers for the food, chemical, paint, lubricants and building supply industries. The company expects to employ 60.
Plastican, which is specifying new machines for the facility, plans to bring in 10 large-sized injection molding machines, ``which is typical of our satelite facilities,'' Brillon said. The Phoenix facility will serve the Southwest and West Coast markets, he said.
At the same time, Ekco Group announced that AB Plastics Corp., a custom injection molder in Gardena, Calif., will produce Ekco's molded housewares products for West Coast customers.
John T. Haran, vice president
and treasurer for Nashua, N.H.-based Ekco, said the Phoenix molding facility was not being utilized fully, but ``we still needed a presence in the Southwest for our customer base.''
A five-year agreement between Ekco and AB calls for AB to mold Ekco's product lines that were being made in Phoenix. AB plans to add six injection molding presses to handle the work, including a 1,450-ton press, according to Michael Gibbs, AB Plastics' chief executive officer. However, Gibbs would not say whether the presses will be moved from Ekco's Phoenix plant, or purchased new.
Ekco ``has a very efficient plant in Worcester, but it's very difficult to run a small molding plant like the Phoenix operation efficiently because you need the same infrastructure as a 30-press plant,'' he said.
``I think we'll be more cost-effective than a small captive plant without all the services available,'' Gibbs said, adding that the company will save on shipping costs by having its manufacturing done in California.
Housewares is a very different type of work for AB, which specializes in molding television housings, consumer electronics enclosures and computer monitors for customers such as Sony, Matsushita, Casio and Hitachi, whose highly cosmetic parts require precision molding.
Gibbs added that the company is not going into housewares molding as an agressive move to diversify.
``This is just a mutual opportunity for our two companies to benefit each other's business,'' he said. ``Anytime you can de- velop a multiyear arrangment ... it gives you the comfort that this is a customer we'll have with us for five years.''
Gibbs said AB plans to open a 90,000-square-foot facility in Mexico in 1997. He is negotiating with several industrial parks in Mexico to build the plant and expects to solidify plans by Dec. 15.
AB Plastics announced in July that it had agreed to sell a majority interest in the company to a joint venture formed by Gibb's investment company, Compass Plastics & Technologies Inc., and Private Equity Partners LLC. Gibbs said he believes that AB will have a 20-25 percent annual growth rate next year, as evidenced by all the company's customers but one.
If that growth continues, Gibbs said, he plans to add two more presses, including another 1,450-ton press. Employees also will be added to accommodate Ekco's molding.
Gibbs said he is working with the founders and now-minority shareholders of the firm to double its size in the next five years, adding, ``We're on track for that.''
Currently, AB Plastics occupies a 97,000-square-foot molding facility and two warehouses totaling 95,000 square feet. It operates 27 presses, with clamping forces of 60-1,800 tons, and offers painting, silk screening, heat staking, hot stamping, pad printing and sonic welding.