CHICAGO — Sentinel Products Corp. plans to spend $15 million in the next two years to expand production in the United States, and it aims to establish its first European factory in the year 2000.
The expansion, combined with a plant in the Pacific Rim expected 18 months after the European plant is built, would give the foam manufacturer annual production capacity of more than 100 million pounds.
The expansion is being driven in large part by expected increases in demand for a chemically blown PE foam. Sentinel touts the product as the first that is priced comparably to physically blown foam, and which can be recycled cost effectively, said Scott Smith, chief operating officer of the Hyannis, Mass.-based firm.
``It's the first chemically blown PE foam that can sell below 50 cents per board foot,'' about the same price as physically blown film, he said. Sentinel claims the chemically blown film is more stable and shrinks less than the physically blown film.
The cross-linked PE foam has a density of 1.5 pounds per cubic foot. The company calls the product SSP-15. Company officials disclosed the expansion at the Pack Expo 98 show in Chicago.
Sentinel said it is aiming SSP-15 as a replacement of physically blown foams and some urethanes in packaging for computers, automotive parts, gaskets, and building and construction products. ``We're replacing a lot of dissimilar materials,'' he said.
About 80 percent of the market now belongs to physically blown films, Smith said.
The company would not release details on the timing of the domestic production increases, other than to say it will add 25 million to 30 million pounds within two years at its plants in Richfield Springs and St. Johnsville, both in New York state.
The two overseas plants will have a total capacity of 30 million to 40 million pounds a year, he said. Those two plants — for which locations have not been decided — will cost about $25 million, Smith said.
The worldwide expansion will give Sentinel enough production to meet its target of hitting $200 million in annual sales within a decade, up from about $50 million per year now, he said.
The favorable economics of recycling the SSP-15 foam means the company now will accept returned scrap material from fabricators, and work that back in with its new resin because it is cheaper to use recycled foam than buy virgin, Smith said.
The company would like to take back post-consumer material but collecting it would pose challenges, and the firm wants to test it with fabricator scrap, Smith said. Sentinel is recycling the SSP-15 foam for two customers now, he said.
The firm currently is reprocessing the scrap at its Richfield Springs plant but is looking for small recycling operations in both the Midwest and West Coast, Smith said.
The company has made unspecified improvements in its recycling process, and the SSP-15 is easier to recycle than other chemically blown foams, he said.
The company can use between 30 percent and 75 percent recycled resins in its production of new foam.