HOUSTON — Wedtech Inc. opened the doors of its new Houston facility in March and plans to have four compounding lines and three grinding lines fully operational by the end of the year.
The new facility will continue Wedtech's focus on toll compounding of polyethylene. At least two-thirds of the Canadian firm's business is in that area, including work with such major PE producers as Dow Chemical Co., Exxon Corp. and Nova Chemicals Ltd. Wedtech's Canadian manufacturing sites are in Brantford, Ontario, and Calgary, Alberta.
Wedtech posted sales of about $50 million in 1998. It does some polypropylene work and will be able to compound polycarbonate and polystyrene, as well, at the new plant — a 130,000-square-foot facility on a 20-acre site in Houston's ship channel industrial area. .
With all-new machines, including three twin-screw lines and a single-screw line, Wedtech will have an advantage over competitors using older Banbury-style equipment, according to plant manager Darrell Lacy.
``Our operating costs will be lower than those of other companies,'' Lacy said. ``We'll also have lower maintenance costs.''
The plant will have annual capacity of 200 million pounds and has enough room to triple that amount. When completed, the Houston site will be the largest of Wedtech's three plants.
The remainder of Wedtech's business is in proprietary products that are similar to those it produces for large resin firms. The company also produces a line of masterbatch PE materials.
Wedtech, based in Toronto, was able to expand in Houston when it severed its ties with ICO Inc., a Houston firm that owns Bayshore Industrial, a compounder in nearby La Porte, Texas. ICO sold its 50 percent share in Wedtech to Polyvector Corp., the holding company that owned the other 50 percent, in late 1997.
Wedtech now competes with Bayshore, but is happy to be in the Gulf Coast region, which has six times as much PE capacity as all of Canada.
``The new plant allows us to cover North America,'' said Dennis Moat, Wedtech's vice president of sales and marketing. ``There's always room for another company, but it's still tough. You have to fight your way in based on your cost structure and service.''
A pair of lawsuits Wedtech and ICO had filed against each other are close to being settled and will not affect production in Houston, Moat added.
Wedtech had hoped to begin operations in Houston last summer, but those plans were pushed back when the firm was unable to find a suitable facility and opted to build a new one.
The firm also plans to invest in process technology to increase its competitiveness, according to primary products business manager Steve Polemenakos.
Lacy, who has worked in plant management for Rexene Corp. and Lyondell Petrochemical Co., said the Houston site's excellent rail access also will be an advantage. The plant's rail siding can hold 30 rail cars, with room enough to expand to 80.
The plant also is benefiting from hiring recent graduates of technical education programs at San Jacinto College and Lee College.
Toll compounding can be a tough, low-margin business, but Lacy said he's confident Wedtech can develop its own niche in the Houston area.
``Toll compounding tends to be lower-valued work, but there's also high-value toll compounding for high-end applications,'' Lacy said. ``There's kind of a perception that anyone can put an extruder in their garage and call themselves a compounder. We're trying to change that image.''