Solvay Group SA plans to open its first plastic fuel-systems plant in Poland to gain greater latitude with carmakers moving to Eastern Europe.
The plant, due to open by the middle of 1999, will serve three carmakers that recently launched assembly plants in Poland and nearby Slovenia, said Edward Mabley, business development manager for Solvay Automotive's North American headquarters in Troy, Mich.
``It's a carry-over from our customers,'' Mabley said. ``In terms of shipping, it's better logistically to operate a plant nearby to [move products] in a proper build sequence. Otherwise, we'd be shipping bulky, blow molded fuel tanks, with a lot of air, too long a distance.''
Late last week, the firm decided to place the new plant in Luban, Poland, less than a mile from a Daewoo Motor Co. Ltd. automotive assembly outfit served by Solvay, said Jean Pierre Hermans, general manager of Solvay Automotive in Brussels, Belgium.
Solvay plans to build a 107,600-square-foot plant that initially will make monolayer, blow molded fuel tanks and fuel filler pipes, Hermans said. The thermoplastic pipes carry fuel from the filler door to the tank.
Both the tank and filler pipes are blow molded from high density polyethylene. Initially, the plant will contain three single-shuttle blow molding machines, including a mix of new Bekum equipment, plus existing machines, Hermans said.
The firm also will install secondary equipment and automated controls at the plant, he said.
Investment at the facility, which will employ 120, was not disclosed. The Polish operation will be a wholly owned Solvay subsidiary, named Solvay Automotive Polska Sp.zo.o..
The initial fuel-tank business could be just the start, Hermans said. The company would like eventually to make nylon air-intake manifolds and other under-the-hood parts at the Luban facility, he said.
``We're not far from the borders to other countries,'' he said. ``Consequently, we're in a nice position to supply other customers with fuel systems or to expand our product mix to cover more of the market.''
Solvay would like to ramp up its presence in Europe, where it runs close behind plastics fuel-system suppliers Kautex Textron of Troy and Paris-based Cie. Plastic Omnium SA, Hermans said.
Worldwide, however, Solvay is considered among the largest-volume producers of fuel tanks, making about 4.5 million tanks annually, Hermans said.
Carmakers are beginning to move into central Europe. Solvay will supply fuel systems for a sedan built by automaker Renault SA Clio in Slovenia, and a minivan from Peugeot-Citroen SA, which has a plant in Poland, he said.
In addition, the company has picked up new business to make fuel systems for South Korea-based Daewoo, which is opening a plant in Luban.
The move should help Solvay make good on its promise to grow in Europe, said equity analyst Youssef Uriagly of Banque Dewaay SA in Brussels. The chemical company's auto parts business records about $600 million in annual sales, Uriagly said. About three-quarters of that is in fuel systems.
``It's one of the company's growth sectors,'' he said. ``Solvay had to go to Eastern Europe to follow big automotive companies looking for cheap labor costs there. All of them want local supply, and this will make Solvay a player there.''
In Europe, Solvay Automotive also has plants in Germany, France, Spain, Italy and England.
Hermans said that plastic fuel-tank production is on an upward spiral in Europe and worldwide. About 40 percent of fuel tanks in Europe are made of plastic today, with the rest stamped from steel. By the year 2002, the company expects that figure to climb above 60 percent, he said.
The same situation applies globally. While North America is moving rapidly to plastic, with most every new car and light-truck platform going that direction, the next wave of growth is expected in Asia and South America, Solvay's Hermans said.
In July, Solvay and Plastic Omnium announced a joint venture to build two plastic fuel-systems plants in Brazil. The plants are scheduled to start production within a year.
By 2002, about half of all cars on the road will feature a plastic fuel tank, Hermans said.
``We'll do what we can to continue as the market leaders,'' he said.