SµO PAULO — Plastic pipe and joint manufacturer Fortilit Tubos e ConexÃµes SA is investing $142 million to build a 377,000-square-foot plant in Sumaré, Brazil, about 60 miles from SÃo Paulo.
The facility — which will make PVC pipe and joints, and polyethylene pipe — is to begin operating in the first quarter of 1998, said Paulo Russomano, general manager of operations. It will be able to process 33 million pounds of PVC for joints, 223 million pounds of PVC for pipe, and 9 million pounds of PE for pipe.
PE pipe will be extruded in the 30 most-used sizes in the market, with diameters from about an inch to 24 inches, for gas, water and drainage. Fortilit also will invest in technology to injection mold PE joints.
Russomano claims the new factory will be the largest and most up-to-date industrial complex of its kind in Latin America.
``The unit will be equipped with state-of-the-art technology, which will guarantee more-competitive costs,'' he said.
The firm already has ordered 40 imported Battenfeld extrusion lines in various sizes, a $40 million investment, plus 120 HL Series Engel tie-barless injection molding machines that cost $20 million more. More than 400 molds were bought for the project, from 15-18 suppliers in Europe, Canada and in the United States.
According to Fortilit's director, the company acquired a 2 million-square-foot area for the plant, thinking of future expansions. Construction is in its initial stage; machinery is set to be delivered in the next six months.
Fortilit is part of Amanco Group, the Latin American branch of Nueva AG of Switzerland. The Brazilian firm already runs two PVC molding plants in Brazil. One of them, in An polis, makes pipes and joints and has a throughput of 53 million pounds a year. A pipe-making plant in Recife processes 26.5 million pounds of resins annually.
The new investment will make Fortilit the second-largest supplier of pipes and joints in the country, with throughput capacity of 344 million pounds per year, Russomano said.
Fortilit expects to dominate 35 percent of the local market, compared with the 7-10 percent it has registered for the past two years, he added.
The company plans to develop a distribution network throughout the country, and will export joints and other value-added products to Argentina, Peru, Ecuador, Colombia and Venezuela in the near future, Russomano said.
According to Wilson Passeto, president of ASFAMAS, Brazil's association of sanitation materials and equipment makers, the domestic pipe and joint market consumed 750 million pounds of PVC last year, compared with 540 million the year before. Brazilian PE consumption for the pipes segment was between 11 million and 22 million in 1996, Passeto said.
For the current year, analysts project growth rates of about 5 percent for the pipe and joint niche, based on two different markets: the recovery of the market for new homes, pushed by better financing options; and growth in the remodeling market, driven by the increased purchasing power of the population.