LONDON — Leading cross-linked polyethylene foam producer Zotefoams plc plans to put its first U.S. plant near Cincinnati but its opening is to be delayed a year to 2001, according to the company.
The firm attributed the delay of the L15 million ($24 million) plant to increased capacity achieved at the firm's single plant at Croydon, England, and a slowdown in demand in the current economic climate.
Croydon-based Zotefoams sees growing demand in North America, especially for its low density foams. But it wants to build a U.S. facility because of a severe U.S. import penalty and the need to win product specification locally.
The 60,000-100,000-square-foot plant will have an initial capacity of about 1.4 million cubic feet per year of foam. The company has not picked a site for the plant, but finance director David Stirling said it will be on a greenfield plot in northern Kentucky, near Cincinnati.
Meanwhile, Zotefoams has been concluding an expansion and process upgrading program at its headquarters. Zotefoams recently started production with a new high-pressure autoclave, incorporating improved heating technology, and a new German-made Leistritz twin-screw 60 millimeter foam extrusion line.
The new autoclave, plus modifications to a test autoclave, allow for faster heating, which in turn allows the plant to make ultralow density foams, to increase capacity, to produce more efficient block sizes and to use a wider range of industrial polymers, according to Zotefoams.
The equipment will expand the Croydon plant's capacity up to 6.3 million cubic feet per year, Stirling said. The facility is equipped with 11 extrusion lines. Three of the newest extruders are twin-screw models.
Zotefoams, the result of a 1992 management buyout from BP Chemicals, originally concentrated sales of its foams to the toy industry. But last year, Zotefoams aimed to dilute its business in toys in favor of other sectors and applications.
Zotefoams reported an unchanged pretax profit of L8 million ($13 million) in 1998 on virtually flat sales at L24.4 million ($39 million).
Zotefoams saw strong 16 percent growth in continental European markets but flat business in Britain and Ireland.
In North America there was a fall in the toy sector demand but strong overall sales.
The North American region accounts for 20 percent of Zotefoams' production. The year was concentrated on product development, said Chief Executive Officer Bill Fairservice.
Zotefoams reported international growth in most sectors apart from toys, particularly for industrial packaging and automotive components.