HOUSTON — Chemtrusion Inc. of Houston is a rarity in the plastics industry — a toll compounder that's growing.
The company, which compounds polypropylene and polyethylene for Exxon Corp. and other major plastics makers, recently completed a 50 percent expansion at its Jeffersonville, Ind., site and is looking to grow beyond the four extrusion lines it operates in Houston.
The two sites have a combined annual capacity of about 125 million pounds.
``Our process technology makes us unique,'' Chemtrusion President Scott Owens said in a recent interview in Houston.
``Other compounders couldn't qualify for these jobs. It's not just our screw design that sets us apart; it's also our configuration of equipment and handling systems,'' Owens said.
Chemtrusion operates the 170,000-square-foot Jeffersonville plant, which opened in late 1996, for Mytex Polymers, a joint venture between Exxon and Mitsubishi Chemical Corp. that produces PP-based thermoplastic polyolefins for use in the automotive industry. The Houston plant serves injection molders and sheet extruders, among others.
Chemtrusion employs 90 in Jeffersonville and about 60 in Houston. Overall sales topped the $10 million mark in 1997.
To reach its current level of success, Owens said Chemtrusion had to survive not only a complicated ownership scenario but a boom-bust cycle that hit the firm in its first three years of operation.
Although Chemtrusion hit the ground running in 1988, industry demand gradually receded, and by 1991 the firm was wondering what direction it should take.
``That was my first lesson in business — that you can't build based on opportunity. You have to add value to the process,'' Owens said. ``You can't just be a `me too' kind of company.''
Things took a turn for the better in 1991 when Chemtrusion ``hit a home run'' through a technological breakthrough in molecular dispersion technology. Owens declined to discuss the advancement in detail, but said it focused on the extent to which a molecule's performance characteristics can be pushed without having a detrimental effect on the molecule itself.
At the same time, Chemtrusion was beginning to benefit from unique screw designs it developed in cooperation with Krupp Werner & Pfleiderer Corp. of Ramsey, N.J. The new designs improved the quality of Chemtrusion's final product and allowed it to expand its business, according to Owens.
The firm added a second twin-screw extruder in Houston in 1993 and replaced a single-screw with a third twin-screw in late 1994. Its fourth twin-screw machine came on-line in late 1997. The company could add a fifth line sometime in 1999.
Though Chemtrusion's ownership history looks complicated, it does not seem to have had an effect on the company's overall business. Chemtrusion was founded as a division of Bamberger Polymers Inc., a Lake Success, N.Y.-based resin distributor owned by holding group Helm Resources Inc. of Greenwich, Conn.
When Bamberger managers bought Bamberger from Helm in 1993, they opted not to purchase Chemtrusion. Helm then merged Chemtrusion with Intersystems, an agricultural equipment maker in Omaha, Neb. This strange pairing has worked to date, as the companies have operated independently of each other, Owens said.
For much of its existence, Chemtrusion has served a core of five or six clients, but the company is looking to go beyond that limit, as witnessed by its recent hiring of Glenn Raspberry as business development manager. Raspberry, who joined Chemtrusion after 11 years with another Houston compounder, is the company's first-ever full-time sales employee.
Raspberry said he welcomes the challenge and believes Chemtrusion is in a good position to expand its market by meeting its changing needs.
``Customers now will come in and want to work with you to bring their product all the way through to completion,'' he said. ``They want to know how they can improve their processing. [Chemtrusion's] strength in material science allows us to say, `Let's get it done.'''
Owens is quick to point out that as Chemtrusion expands, it has no plans to develop its own proprietary compounds as many toll compounders are tempted to do.
``A lot of compounders do toll compounding to cover expenses,'' he said. ``They want to make proprietary compounds, but then they have to be the low-cost producer. That works until the resin price drops and they're caught out of the cycle.
``Our customers put us in business, so why should we compete with them?'' Owens asked. ``Our success leads to their success.''