Sommer Allibert SA plans to join the conga line of automotive suppliers moving to Brazil by opening an injection molding plant there.
The company, based in Nanterre, France, expects to start production in August at a new facility in Curitiba, Brazil. The plant, in the southern end of the South American country, will mold parts for instrument panels, door panels and glove box doors.
The interior parts supplier plans to invest $50 million to build the 135,000-square-foot plant and add equipment, said purchasing engineer Stephane Beauchamp of the company's Curitiba-based South American division, called SAI Autopecas.
The facility, Sommer Allibert's first fully owned plant in South America, lays the groundwork for future contracts with a host of European and U.S. automakers coming to Brazil, Beauchamp said.
The company expects to begin work next year with Renault SA, Volkswagen do Brasil SA and Audi AG, he said.
However, Beauchamp admitted that return on investment could take some time after the Brazilian economy took some lumps from the recent Asian financial crisis.
``It's a new, big market, but I'd have to say business has been a bit less than expected,'' Beauchamp said. ``But we have a three-year startup, and we expect to have quite a bit of business in the longer term. Many companies are moving here in expectation of strong market forecasts in the future.''
The French firm has plenty of company in Brazil. General Motors Corp. and Ford Motor Co. together have invested more than $5 billion to set up assembly plants in the country, joining many European and Asian carmakers.
In addition, a litany of plastics auto parts suppliers have ridden on automakers' coattails. In 1998 alone, Decoma International Inc. of Aurora, Ontario; Excel Industries Inc. of Elkhart, Ind.; Toronto-based ABC Group of Cos.; and Cooper Industries Inc. of Chesterfield, Mo., opened or announced that they plan to open plants in Brazil.
The Sommer Allibert facility will employ about 50 when it begins production in late summer. By the end of next year, the plant expects to have 300 workers, Beauchamp said.
Next year, the plant will begin molding parts for Renault's Scenic passenger car, the Audi A3 sedan and Volkswagen's Golf. By 2000, the company expects plant sales to top $43 million, Beauchamp said.
The facility will start with seven injection presses with clamping forces of 850-3,200 tons, and two thermoforming lines. The plant primarily will produce instrument panel parts from polypropylene and an ABS/polycarbonate blend and door panel parts from ABS and PP.
While many other interior suppliers are located near Sao Paulo, Sommer Allibert is one of the first to position itself in the south of Brazil, where its main customers have plants, Beauchamp said.
Ford plans to open an assembly plant in the area next year, he added.
Sommer Allibert also operates a 50-50 joint venture with Irausa American Co. of Troy, Mich., to make door panels for Ford and other customers, Beauchamp said. The venture operates a plant in Sao Paulo.