MEXICO CITY — Specialty compounder Padanaplast SpA is increasing the size of its plant in Parma, Italy, and adding on a second line at its Chicago plant that opened last summer.
The Italian firm already exports to more than 50 countries, but hopes to add Mexico to the list. President Carlo Avanzini participated in a trade mission to three Mexican cities from March 22-26.
Padanaplast was established in 1972 in Parma as a PVC compounder. By 1978, the company was manufacturing cross-linked polyethylene compounds under a license from Dow Corning, and a few years later it added halogen-free, flame-retardant compounds, as well as cross-linkable rubber compounds.
By 1990 Padanaplast left the PVC compound market to concentrate on those other products.
``We currently have about 60 percent of the market in the U.S. and Canada for cross-linked PE compounds,'' Avanzini said in an interview during the mission to Mexico. Padanaplast also has close to 60 percent of the European market. The compound is used mainly for hot water piping, he said.
The company won National Sanitary Foundation certification in 1996, which permits its use for drinking water in the United States. The company then began importing to the United States, and given the great demand, decided to open a plant there.
Padanaplast USA Inc. is a 50-50 joint venture with an unidentified Italian investor. The venture opened a 43,000-square-foot plant in Chicago in July 1998, an investment of $3 million. The plant opened with one line.
The firm plans to add a second line in the year 2000, at a cost of $1.5 million to $2 million, he said.
``We are sure that in the future we will add on the third line as the market will require it,'' he said. The plant has 25 employees.
Cross-linked PE demand has picked up since Shell Oil Co. stopped making polybutylene pipe resin in 1996. That followed a $950 million settlement of a class-action lawsuit over leaking plumbing systems.
Padanaplast may supply Mexico from Chicago, he said.
The Mexico mission was organized by two Italian chambers of commerce, one from Mexico City, the Camara de Comercio Italiana en Mexico AC, and the other from Parma, the Parma Chamber of Industrial Commerce.
Padanaplast reported 1998 sales of about $38 million, an increase from the $33 million reported in 1997. Of that, $26.5 million dollars was from exports.
The firm has invested steadily in the Parma plant, spending $2.3 million in 1996, $3.3 million in 1997 and $2.5 million in 1998.
``In 1995, the Italian government modified its security norms for workers, one of the reasons why the company decided to expand and modernize,'' Avanzini said.
The plant has a total of 61 employees, with 34 in production.