Standard Products Co. is opening its first plant in Poland later this year as it attempts to follow carmaker Fiat SpA around the globe.
The Dearborn, Mich.-based company plans to extrude plastic and rubber auto-body sealing products for Fiat's Palio world car, said Standard Products Chief Financial Officer Donald Sheley Jr. The 55,000-square-foot plant in Bielsko-Biala, Poland, near Fiat's assembly plant, will start with one extrusion line.
Standard Products initially is investing $2 million to $3 million in the plant, scheduled to open by year-end, Sheley said. As work dictates in Europe, the company is considering expanding the site in several years and adding more extrusion lines, he added.
Poland offered a low-cost location for a plant, Sheley said. The firm bought land there and constructed the plant at a partially built facility.
``It gives us an important presence in the Eastern European market,'' Sheley said. ``It's our intent to take advantage of that and grow the business there.''
Equity analyst Alexander Paris Sr. of Chicago-based Barrington Research Associates Inc. said the plant will put the firm in a good position to serve carmakers now entering that region in droves.
``These things build on each other,'' said Paris, who follows the publicly traded company. ``They'll be in Poland with Fiat, and that gives them a better chance for contracts with other automakers. Almost all expansion [by carmakers] is geared overseas right now.''
Standard Products also has a plant in Varginha, Brazil, that supplies about 2,500 sealing systems a day for the Fiat Palio hatchback and Palio Weekend station wagon. The extruder is the sole supplier for Palio sealing systems in Brazil, Sheley said.
Standard Products would like to be the worldwide supplier for the Palio, Sheley said.
``We have to evaluate how many [plants] we can build in different areas where Fiat is going into,'' he said. ``We want to go forward with the company.''
Palio models, which include a sedan, are assembled at plants in Brazil and Argentina, said New York-based Fiat spokesman Paolo Vannini. The Palio hatchback will start production in Poland later this year, he said.
The Palio, designed for emerging markets, also will be produced by Fiat and joint venture partners this year in India, Russia, Morocco and Turkey, Vannini said. Fiat is considering China and South Africa, he said.
Fiat is talking with Standard Products about opening a plant in Bursa, Turkey, and possibly in India and Morocco, Paris said. The carmaker plans to make more than 900,000 Palio models by the end of century, Vannini said. It already has made more than 400,000.
The last Standard Products move in Europe was its 1993 purchase of Paris-based Standard Industriel. The company also operates four plants in France and three in the United Kingdom.
In addition, Standard Products is building a dedicated sealing systems plant in Baclair, France, to replace an aging complex in nearby Bolbec, Sheley said. Details on the plant, to be completed in late 1998, were not available.
Standard Products is well-positioned financially to make a larger European move, Paris said. Results for its fiscal-1998 third quarter showed a profit of $13.6 million on sales of $277.9 million. That profit, the highest for the third quarter in the firm's history, compared with profit of $500,000 on sales of $281.8 million for the same period a year ago.
Standard Products, which employs more than 10,000 at 40 plants, recorded $1.11 billion in sales for fiscal 1997. It ranked fifth in Plastics News' survey of pipe, profile and tubing extruders, with an estimated $296 million in North American extrusion sales.