DETROIT — Cutting a wide swath to expand capacity, automotive supplier Key Plastics Inc. has bought a Canadian custom molder and another injection molding plant in Howell, Mich.
Key, based in Novi, Mich., closed June 12 on an agreement to purchase Acco Plastics Ltd. of Markham, Ontario, for an undisclosed price.
Acco, which operates two injection molding plants in Markham, gives Key its entree to the Canadian market. Together, the plants have 41,000 square feet, and the company employs about 120.
The Acco plants, which make products similar to Key's line, have 26 injection and insert molding presses, with clamping forces of 50-260 tons. Company sales were C$10 million to C$20 million (US$6.9 million to US$13.8 million) annually, according to a Canada business directory. Acco officials declined comment on Friday.
Key also has purchased a 116,000-square-foot molding plant in Howell from Walled Lake, Mich.-based supplier Libralter Plastics Inc.
The facility, purchased June 5 for an undisclosed sum, will become one of Key's biggest facilities among its 22 plants worldwide. The only plant larger is Key's 168,000-square-foot flagship facility in Plymouth, Mich., which molds interior and exterior auto parts.
Libralter had decided to exit the large exterior parts business to concentrate on other operations, Executive Vice President Alan Barr said May 21. The exterior-trim plant employs 180, more than a quarter of the company's 675-member work force.
Several potential buyers expressed interest in the plant, Barr said.
``We want to concentrate our resources on our interior trim operations,'' Barr said. ``Those areas will be our strengths in the future.''
Libralter is not departing the exterior parts business, but will sharpen its focus on smaller exterior trim products, Terry Kazakos, Libralter marketing and sales vice president, said in a news release.
Libralter officials declined additional comment on the sale.
Industry analysts estimated the Howell plant's sales at $20 million to $25 million a year, based on the number of people employed and products made there. Typically, a plant's acquisition price is about 80 percent of annual plant sales, one analyst said.
The deal pares the number of Libralter's plants to sites in Walled Lake and Westland, Mich. Those plants make interior parts for instrument panels, seats and center consoles, as well as some smaller exterior and structural parts.
The Howell plant, built in 1989, specializes in exterior body side moldings that require larger presses and paint operations. The sale includes four injection presses, two with clamping forces of 1,500 tons and two at 1,000 tons; a major exterior-parts paint line and assembly operations.
The plant primarily does work for General Motors Corp. on several of its car and light-truck models, said Joseph Buzzitta, Key's director of sales and marketing. The plant was expanded to its current size four years ago.
Key is considering new work at the expansive facility to make exterior door handles and possibly mirror shells, Buzzitta said. Key claims to be the largest independent supplier of plastic automotive door handle assemblies in North America.
``The primary reason [for the purchase] is to increase capacity for painting and the assembly of exterior trim products,'' Buzzitta said. ``We do a lot of work already with GM, and this definitely enhances our position with them.''
Sales to GM accounted for about 13 percent of Key's business in fiscal 1997, according to a recent Securities and Exchange Commission filing. The molder's largest customer is Ford Motor Co., which accounts for about half of Key's sales.
The Acco plants serve a variety of automakers, molding precision thermoplastic parts including door handles, instrument panel bezels, body moldings, window system components, fuel filter parts and components for door systems.
Key and Acco complement each other in customer base and product offerings and the combination will enhance service to Canadian customers, Key President Leonard Griffin said in a prepared statement.
Key also is a leading supplier of pressurized plastic bottles and reservoirs, louvers, speaker grilles and air bag covers.
The privately held company recorded sales of $306 million in 1997, compared to $217 million the previous year. Partly due to early debt retirement, company profit last year dropped to $1.67 million from $7 million in 1996.
The company's total debt was $219 million in 1997, compared with debt levels of $144 million the year before.
Besides the Howell plant, Key operates Michigan facilities in Plymouth, Port Huron, Chesterfield and Grand Rapids.
It purchased the Chesterfield and Port Huron facilities in March 1997 from Maumee, Ohio-based Aeroquip-Vickers Corp. in a bid to expand Key's production of decorative bezels and other instrument panel parts.
Plastics News ranked Key 19th on its most recent list of top North American injection molders, with $251.7 million in relevant 1997 sales. Libralter ranked 40th, with sales of $109.1 million.