Canadian compounder Wedtech Inc. will open a manufacturing facility in Houston this summer, replacing an Oklahoma plant that closed in February.
The Toronto firm's new, 130,000-square-foot plant will be located on a 20-acre site in Houston's ship channel industrial area and will be able to produce 200 million pounds of material annually. Wedtech also operates plants in Branford, Ontario, and Calgary, Alberta.
The new plant will operate eight extrusion lines and employ 50. Wedtech also has room to expand at the site.
``It's important for us to tap into this market,'' Wedtech President John Lefas said in a recent telephone interview. ``The polyethylene supply in the Gulf Coast area is six times that of Canada and it's all concentrated in one place.''
The company's Dewey, Okla., plant shut its doors last month. All 15 of the plant's employees have been offered jobs in Houston.
``It didn't make sense to have two plants so close to each other,'' Lefas said in explaining the decision to close the Dewey facility.
Wedtech's compounding and masterbatch businesses have grown significantly recently, while its custom grinding business for rotational molding powders has remained steady.
Most of Wedtech's compounding activity has been in PE, with major suppliers including Dow Chemical Co., Exxon Corp. and Nova Chemicals. Wedtech also has done some polypropylene compounding and, with the Houston move, will have access to other polymers such as polycarbonate, Lefas said.
Lefas expected the company's 1998 sales to reach $50 million even before the Houston move was announced. The company's 1997 sales were in the $40 million range.
The move also will increase Wedtech's competition with ICO Inc., the Houston firm that recently sold its 50 percent interest in Wedtech to Polyvector Corp., a holding company that had owned the other half of the firm. Lefas is majority owner of Polyvector, which paid $14.4 million for ICO's share of Wedtech.
Wedtech had competed against Bayshore Industrial, an ICO-owned compounder in La Porte, Texas. Lefas said ICO's interest in Bayshore had prevented Wedtech from moving into the Houston area.
``Now we have the freedom to do what we want competitively,'' Lefas said. ``Before, [ICO] was holding us back.''
ICO officials declined to comment on the Wedtech expansion because of a lawsuit the company has filed against Lefas and Wedtech. Lefas said he has filed a countersuit against ICO but would only say the issue is ``ownership-related.''