Bottle maker CNC Containers Corp. and a South American partner said May 26 they plan to spend $5 million to open a joint venture PET preform injection molding plant in Lima, Peru, CNC's first facility outside the United States.
CNC and PET Products International of Lima want to open the 75,000-square-foot plant and put in two injection presses by September.
The operation will allow CNC to expand its preform business in South America, which already generates $17 million in annual sales, said Mel White, president and chief executive officer of the Tumwater, Wash., firm.
Talks between the companies began about two months ago. CNC's interest in South America picked up after political turmoil and violence in Indonesia threw the company's plans for a Jakarta factory increasingly into question, White said.
``We've just diverted our energies to this at this time,'' he said. ``We still want to [build in Jakarta], but we won't do it until we get a proven, stable economic environment.''
The economy of Peru, on the other hand, is strong and the government is more stable, leading to ``tremendous'' growth in the market, White said.
The Peruvian factory's two machines will have at least 300 tons of clamping force, using 48-cavity molds to make preforms for 11/2-liter soda bottles, White said. More injection molding machines should be added later this year and next, he said.
A majority of CNC's business comes from blow molding bottles, and the company is looking for opportunities in South America, but the market may be more difficult because many of the local bottling companies there do their own blow molding, White said.
The plant will be an equally owned venture between CNC and PET Products, which in turn is owned by International Packaging Systems of Ann Arbor, Mich., and Walter Yager, a Peruvian businessman who lives in Brazil. IPS has blow molding facilities in Brazil, White said.
PET Products has been CNC's sales agent in South America for the past year, White said.
CNC has about $130 million in sales, with about 70 percent of that coming in blow molding and the rest in injection molding. The firm ranked 22nd in Plastics News' 1997 ranking of blow molders, with $80 million in relevant sales.
The company has four manufacturing plants in the western United States. Three of them have been built in the past two years.