A year after entering the plastics industry, contract manufacturer Elamex SA de CV has inked a deal to spin off its plastics business as a joint venture with GE Mexico SA de CV.
GE Mexico, a subsidiary of General Electric Co., will be a customer for the venture.
Elamex, a public company listed on the Nasdaq exchange, acquired plastic molder and metal stamper Eurotec SA de CV in July 1997. Carlos D. Martens, Elamex's chief financial officer, said the GE venture is an outgrowth of that acquisition.
``The idea since the beginning was to revise [Eurotec's] former customer mix, and favor industrial clients over consumer goods or toy manufacturers,'' Martens said in a July 15 telephone interview from his office in Ciudad Juarez, Mexico.
Eurotec, which also was based in Ciudad Juarez, had customers including Hasbro Inc., Honeywell Inc., Eureka Co. and Toshiba America Inc. Elamex now supplies those customers with contract manufacturing services, in addition to plastic and metal parts.
Elamex approached other industrial companies and they showed interest, but ``they told us, `Come back in a year,''' Martens said. ``We went to work.'' Elamex's plastics division received ISO 9000 certification in December.
``Then we went back and the companies were very receptive,'' he said. Many of those industrial producers had been importing molded products from as far away as Asia.
One of those firms was GE Mexico, which has several operations in Ciudad Juarez. GE Mexico urged Elamex to comply with GE's Six Sigma quality program.
According to the agreement, Elamex will hold a slight majority of the venture, and GE has committed to $10 million in annual business. GE will gain an option to buy 6.3 percent of Elamex, and will have a member on Elamex's board of directors, Martens said.
GE Mexico officials were not available for comment.