Discas Inc., a Waterbury, Conn.-based recycler, injection molder and compounder of recycled material, followed up an initial public offering with the acquisition of one of its suppliers of polypropylene scrap and the expansion of its Christie Products subsidiary.
Discas raised $3.1 million in the stock offering, which was done to generate working capital, according to the company's prospectus. Shares began trading Aug. 14.
The firm will invest the funds in equipment, tooling and hiring new employees, said President Patrick DePaolo Sr.
``The trend is toward [consolidation] in the recycling industry,'' he said. ``Our direction is to look at opportunities for growth in vertical integration and for potential associations or mergers.''
For the year ended April 30, Discas reported sales of $1.88 million.
The company bought the assets of the AKD division of Ash-Kourt Fabrics Inc. on Oct. 29. Terms were not disclosed. Discas and Ash-Kourt had formed the AKD LLC recycled feedstock joint venture in July 1996.
AKD densifies scrap PP from the textile, film and fiber industries and sells the raw material to Discas and other firms in the Southeast. Ash-Kourt, one of AKD's suppliers, provides approximately 30 percent of Discas' feedstock. Discas and Ash-Kourt, based in Statesville, N.C., have signed a long-term supply agreement.
``The acquisition is consistent with Discas' vertical integration consolidation strategy and gets us close to our sources of supply,'' DePaolo said.
Discas Southeast will open in a 32,500-square-foot leased building in Statesville around Jan. 1. It will start with eight to 10 employees.
The plant will include manufacturing and distribution for Discas' Christie Products subsidiary, which makes injection molded agricultural products. The company is adding three injection molding presses and upgrading some existing lines.
Discas bought the Christie unit in November 1996 from Kenilworth, N.J.-based Christie Enterprises Inc. The firm had been a customer of Discas. Earlier this month, Discas purchased several nursery container molds from Union Products Inc. in Leominster, Mass.
``These complement our current 60 molds, giving us a total of 75,'' said DePaolo.
One of the new product lines includes thick-walled planters that look like terra cotta and come in three sizes, ranging from 14-24 inches in diameter. The subsidiary's primary products were directed toward the nursery growing business.
With the new molds, the company expects to move toward the decorative and greenhouse end markets.
Discas was founded in 1985 by DePaolo. The company uses mainly post-industrial PP and offers standard PP grades, impact- modified PP, custom compounds, filled and reinforced PP, standard precolored PP and thermoplastic elastomers.
The company will employ about 100 at three plants when the Statesville site opens.
Discas leases about 55,000 square feet of industrial and office space in Waterbury. The facility includes a research center, two densifiers, four compounding extruders and six dry blending machines.
The 24,000-square-foot Kenilworth site is a warehouse and office for the company. It also operates 13 injection presses with clamping forces of 200-700 tons.