CORONA, CALIF.—Polystyrene pro- cessor Marko Foam Products Inc. plans to spend $2 million to open a Mexican plant, pulled by market growth and customers that already have set up shop there.
The facility will start production in November with about 40,000 square feet and four or five large foam molding machines but could expand to 90,000 square feet and a dozen machines in a year or two, said Bob Mallon, vice president of Marko.
The plant will be in Mexicali, about 100 miles east of Tijuana. It will employ 15-20 to start, but is likely to expand in early 1998.
The company is moving into part of an existing building. The plant will make cushion packaging for consumer electronics from expanded PS, polyethylene and polypropylene foams.
Marko customers such as Sony and Mitsubishi have moved production there and have pushed Marko to move nearby. Some of Marko's California business is moving to Mexico, Mallon said.
The company considered putting the facility on the U.S. side of the Mexican border but decided against it because of higher labor costs in the United States and much less stringent environmental regulations in Mexico, he said.
``There is no great reason not to be shipping across the border, but the costs of staying on the U.S. side are prohibitive,'' he said.
Rent and utilities are about the same on both sides, he said, but in Mexico labor is cheaper and the firm will not have to comply with air quality regulations that he said have cost it $1 million during the past three or four years.
``We looked at areas along the U.S. border but there was no real interest on the part of local government authorities,'' Mallon said. ``The U.S. has been fairly blasé about keeping this type of industry.''
This will be the company's fifth plant, and its first in Mexico.