Continuing its trend to move into new countries, Solvay Automotive is opening plastic fuel-tank plants in Eastern Europe and Asia.
The company plans to open a plant in Romania by 2001 and Thailand by the end of next year, said Solvay Automotive Chief Executive Officer David Westgate, based in Troy, Mich. The Romanian plant will be the company's second in Eastern Europe.
``With Eastern Europe opening up, we see nice-sized growth potential there,'' Westgate said in a May 6 telephone interview. ``There's a tremendous advantage being close to our customers. They're moving into some new regions.''
The Romanian plant will be a joint venture with Subansamble Auto SA, an automotive-parts supplier in Pitesti, Romania. Solvay will own 51 percent of the partnership.
Solvay, among the top three producers of plastic fuel tanks in Europe and North America, will supply several carmakers in Romania and other automakers, Westgate said.
But Westgate also recognizes that moving there is a bit of a gamble. Few other suppliers have set up operations in Romania, a former Cold War opponent. But, at the same time, the country is launching a more-aggressive economic development plan to bring in foreign business.
``There's still a lot up in the air there with the local economy,'' he said. ``We'll be on the cutting edge by moving into a developing country early.''
The company is looking for a plant site and eventually expects to employ more than 65 people at the location, Westgate said. Investment costs were not disclosed.
The plant primarily will blow mold monolayer plastic fuel tanks from high density polyethylene and will make other fuel-system parts, including fuel filler pipes.
In Thailand, Solvay Automotive wants to open a plant by the end of next year, Westgate said. The plant initially will serve carmakers General Motors Corp. and Isuzu Motors Ltd. at assembly plants in that country.
The plant, to be wholly owned by Solvay, will be 60,000-80,000 square feet and employ about 100 people. Sites and equipment needs are being determined.
``Thailand could be very explosive for growth,'' Westgate said.
The company also operates a customer service center in Japan.
Asia continues to be a magnet attracting fuel-tank suppliers, even with the economic problems there. Solvay competitor Kautex Textron, a division of Textron Automotive Co. Inc. of Troy also is planning major moves into Asia.
Kautex is preparing to open wholly owned facilities in India, Malaysia and Thailand and begin joint ventures in South Korea and Japan, said Kautex President Hans-Dieter Lesch from his office in Bonn, Germany. All those plants should open within the next several years, he said. Kautex also opened a plant in China in 1996.
Driving the growth in Asia has been a movement from steel to plastic for fuel tanks among Asian carmakers, Lesch said. The market has lagged a bit behind that of Europe and North America.
But Honda Motor Co. Ltd. and other Asian carmakers are beginning to make the change as part of a shift to lighter-weight vehicles.
``Asian carmakers have been very conservative in [moving] away from steel,'' Lesch said.
Solvay also is opening a new plant in Luban, Poland, later this year. The 107,600-square-foot facility will serve automakers Renault SA and Daewoo Motor Co. Ltd.
Solvay is the largest producer of plastic fuel tanks worldwide, Westgate said. The company expects to record sales growth of about 15 percent this year, reaching $630 million to $650 million, Westgate said.
Solvay ranked 10th on Plastics News' survey of blow molders in 1998, with $250 million in North American blow molding sales.