HAMILTON, ONTARIO — After recording double-digit sales growth during the past five years, Samsonite Corp.'s Engineered Plastics Division is girding to take its automotive operations worldwide.
The Stratford, Ontario-based division is Samsonite's only operation to custom mold interior automotive parts, an area the group entered in 1989 after losing its core toy business from Lego Systems Inc. Since 1993, the Samsonite operation has invested in more than 20 new injection presses and several vacuum forming lines.
Now, the unit's Denver-based, luggage-making parent plans to capitalize on the division's turnaround by adding auto parts molding to other Samsonite facilities, said Gil Kilmer, sales director of the plastics division, part of Stratford-based Samsonite Canada Inc.
Those plans could include creating new auto parts plants or acquiring other facilities, he said. The unit would like to expand to such regions as Mexico, Brazil and Western Europe, all areas where Samsonite has plants.
Kilmer cautioned that the move could happen as soon as a year from now or as long as five years out. But the success of the division, operating from a single Stratford plant, is spurring the need for a broader reach, he said.
``The opportunities are there for Samsonite to take the business worldwide,'' Kilmer said in an April 23 interview at the Canadian Automotive Parts Manufacturers Association conference in Hamilton. ``And we plan eventually to do that. [Auto parts] are becoming more a cornerstone of our company, and Samsonite already has the plants in place to grow quickly.''
Samsonite gave the division its full backing in 1993 and offered the financial resources for it to grow into a larger custom molder. Since then, the division has added $3 million to $5 million in equipment annually, Kilmer said.
The overhaul included discarding the division's eight old presses and adding 21 new machines with clamping forces of 110-800 tons. The firm set a policy that none of its equipment should more than five years old, he said.
Last year the company added four presses, three at 720 tons and one at 210 tons. Two more similarly sized presses were installed in 1998. The company may add three more, taking the total to about 24 by the end of the year, Kilmer said.
The company also has folded in both vacuum forming and plastics extrusion at its 212,000-square-foot Stratford plant. In the past five years, three twin-rotary and one in-line vacuum forming units were added, as well as a 3-inch sheet extrusion line. The company also has installed robotic manufacturing cells.
The new equipment has helped the division match its sales growth and new customer roster with the right equipment. Currently, the division records $15 million to $20 million in annual sales. Within two years, those figures should double, Kilmer said.
Still, that sales growth is not enough in an industry where size matters considerably, he said.
``Once we're at $50 million, we'll still be in diapers,'' Kilmer said. ``That's because size is so important. That's why we plan to work with our parent company to take this business to another plateau.''
The division has prepared for that growth by engineering a major reversal of fortune. The operation, in business for more than 60 years, had molded Lego sets and other toy parts until 1988, when Lego took its work to Denmark. The next several years were fairly lean, as the company began molding bearing housings for Fisher Bearing Co., which is adjacent to the Samsonite plant.
In 1993, with Samsonite's impetus, the division began shopping for custom molding automotive work. Now, the group molds such high-precision parts as map pockets, center consoles, air vent covers and speaker grilles for a variety of larger auto parts suppliers.
Its end-use customer lists include the Big Three automakers, Volkswagen AG, Audi AG, and General Motors Corp.'s European-based Adam Opel AG division. Its parts appear on new GM Cadillac models and Ford Motor Co.'s Windstar minivan.
Auto parts account for about 90 percent of the division's sales, with another 10 percent coming from industrial uses. The company uses a variety of thermoplastics, including polypropylene, nylon, polycarbonate and PVC.
About one-third of the Stratford plant is used for molding. The operation includes a small tool shop with several computer numerically controlled machines, warehousing space for Samsonite's luggage products and a sales and engineering office.