Geon Co. of Avon Lake, Ohio, has continued its growth in the PVC compounding market by acquiring Adchem Inc., a PVC plastisol maker and plastics additives distributor based in Kennesaw, Ga.
Geon also announced a $19 million expansion of its dispersion PVC resin plant in Henry, Ill., that will add new equipment to its existing production line and boost capacity 25 percent.
Adchem will be merged with Wilflex, a Kennesaw-based vinyl plastisol ink maker that Geon acquired earlier this year. Adchem founder and owner George Hart will manage the combined businesses. Adchem personnel and equipment also will be transferred to the Wilflex site.
Adchem, which employs 20, expects to post sales of more than $10 million this year, after recording $8.4 million in 1997. Plastisols are dispersion PVC compounds that contain high levels of plasticizers to increase flexibility.
``This is another step in our strategy to add earnings growth by acquiring complementary, value-added businesses,'' Geon President and Chief Operating Officer Thomas Waltermire said in a news release.
Adchem's product mix is very similar to that of Plast-O-Meric Inc., a Sussex, Wis.-based plastisol maker that Geon acquired earlier this year, Geon's Dennis Cocco said in a telephone interview. Cocco is vice president of corporate and investor affairs.
Both Adchem's and Plast-O-Meric's products are used in automotive armrests and dashboards, tool handles, air and water filters and other products. With the Adchem acquisition, Geon now controls more than 40 percent of the North American plastisol market, according to Cocco.
The move also will allow Geon to market plastisols into the Southeast, a region in which Plast-O-Meric's sales had not been particularly strong.
Adchem also operates a distribution business for plastic additives, such as blowing agents and pigments. Cocco said Geon has not decided if it will continue to operate this portion of the business, which accounts for less than 25 percent of Adchem's sales.
The expansion at the Henry dispersion PVC plant will be completed in the third quarter of 1999. Production at the plant, which employs 100, will continue during the expansion project. The Henry facility also produces blending and powder coating PVC resins.
Geon and Occidental Chemical Co. of Dallas lead the North American dispersion PVC market. Geon declined to release production totals. Uses for dispersion PVC include the top wear layer of vinyl flooring and in the decal and metal-coating markets.
Geon also is working to close a major deal in which it would merge its PVC resin business — not including dispersion PVC — with that of OxyChem. OxyChem would own 76 percent of the proposed venture. As part of the deal, Geon would receive OxyChem's PVC compounding business. Once the deal closes, OxyChem/Geon will surpass Shintech Inc. of Houston as North America's largest PVC maker.
The closing date for the deal has been pushed back from early September to early January.
Cocco said the delay is a result of ``the magnitude of the deal'' and is not because of any difficulties between the two firms.