Fagerdala World Foams AB, a Swedish automotive foam molder, has purchased a Michigan-based polystyrene processor as a launching pad for its first major expansion into North America.
The company, located near Stockholm, Sweden, opened a holding company, Fagerdala USA Inc., in Lexington, Ky., last year and began looking for sites to start a North American plant, said John Ballinger, Fagerdala USA North America area manager.
The company claims to be one of Europe's largest producers of expanded polypropylene bead and molded parts and extruded PP sheets for the automotive industry. Fagerdala has close to 900 employees and recorded about $155 million in 1998 sales.
``We've had a lot of success in Europe with our products and have expanded to Brazil, Asia and China,'' Ballinger said. ``But to be committed to the automotive market, we needed an operation near Detroit. We found the perfect fit.''
In December, the company purchased Pac-Lite Products Inc., a shape molder of expanded PS and PS/polyphenylene oxide foams. The purchase price for the small, Marine City, Mich., company was not disclosed.
Now, Fagerdala is planning a major expansion at Pac-Lite, founded 41 years ago by Stuart MacDonald, a pioneer in polystyrene processing. MacDonald died in 1997, and the company had been owned by his estate.
Sales for the privately held, 50-employee company were not disclosed, but Ballinger said the volume was small. The company's products are mainly used for side-impact protection in door panels and instrument panels, said Pac-Lite General Manager Louis Kar.
``We were looking to be purchased by a company that could bring some new technology and greater resources,'' Kar said. ``This should give the company quite a boost.''
By the end of 1999, Fagerdala plans to move the Pac-Lite operations to a new facility of about 100,000 square feet in the Marine City, Mich., area, Ballinger said. The existing, 50,000-square-foot Pac-Lite plant will close when the move is complete.
Fagerdala also will add its expanded PP and extruded PP sheet foam production to the new plant, which will continue to mold PS and PS/PPO beads. The company will invest at least $6 million in the new plant for equipment, Ballinger said.
Pac-Lite currently has 17 foam molding presses, Kar said. Some of the older machines will be replaced during and after the move, he said.
Fagerdala wants to convince automakers to substitute polyurethane foam used on many auto interiors with its PP and PS energy-absorbing material, said Ballinger.
The PP foam can undergo high temperature requirements and help automakers create a more recyclable interior by making a door, instrument panel or headliner from one olefinic material, Ballinger said.