TORONTO — Royal Group Technologies Ltd. has firmed up plans for a vinyl extrusion operation in Poland.
Royal announced Sept. 16 it will build a 242,000-square-foot manufacturing facility in Polkowice to make vinyl siding, window profiles and components for its Royal Building System. The manufacturing plant itself will be based on Royal's building system comprising interlocking, hollow vinyl posts and panels that can be filled with insulation or concrete.
Polkowice is a special economic zone that offers tax benefits to companies locating there, according to Mark Badger, vice president of corporate communications.
Toronto-based Royal first disclosed plans for a Polish plant in early 1996 when it acquired majority control of American Building Products Corp., which had a network of 20 distributors in Poland. Royal's current schedule for plant completion next summer is about a year and a half later than it originally intended.
Royal officials declined to provide cost and equipment details.
The vinyl extrusion major said Poland's government has ordered C$2.5 million (US$1.8 million) worth of Royal's building system kits. Poland plans to use them to help restore areas damaged by heavy floods this summer. Royal is making the kits at a Toronto facility and shipping them to its Polish subsidiary Royal Europa Sp.z.o.o., which will complete their construction this fall.
Vic DeZen, Royal chairman, president and chief executive officer, said the plant will help his firm respond to increasing demand in Eastern Europe. Royal has 26 distributors in the region for its vinyl building products. Poland's economy alone has been growing at 6 percent a year, Royal estimated in a news release.
A plant in Argentina began producing Royal's building system components in early September. Other building systems plants — in Colombia, China and Mexico — are scheduled to begin operations this fall.
Royal also announced plans to raise US$165 million through a private placement of senior unsecured notes to institutional investors.
The firm will use the proceeds to repay US$100 million in debt and expects to use the rest for 1998 capital expenditures and acquisitions. The company expects to complete the financing deal in October and receive the funds in November.
