TROY, MICH. — Automotive injection molder Andover Industries will spend $5 million to expand into the European automotive market with a new production and sales operation in Norway. Construction on a $2 million, 25,000-square-foot facility will begin in the spring on land owned by polyolefin supplier Borealis A/S in Ronningen, Norway. Andover plans by 2004 to spend another $3 million and expand the operation to 100,000 square feet and employ as many as 50, said Zachary Savas, president of the Troy-based company.
"There's some opportunities for us to do some European business," Savas said. "We want to serve our major customers there."
The company now turns out interior and exterior pieces for the North American market, such as instrument panels, floor consoles, air-bag covers, facias and grilles.
The privately held company posted more than $120 million in 1999 sales and has more than 700 employees at three factories.
In Europe, Andover is taking aim at contracts with General Motors Corp.'s Saab and Opel brands, Volvo Truck, DaimlerChrysler AG and Ford Motor Co.'s Th!nk Mobility LLC unit.
"The Scandinavian market is the first one we want to go after," Savas said. "We'll expand from there."
Production will start in about a year, he said. Although Andover will build on Borealis land, it will operate independently, said Mark Kennedy, vice president of marketing and sales. The manufacturer has a technology agreement with the Lyngby, Denmark-based supplier, but no purchasing contract.
The location, however, will give Borealis a definite business toehold, Savas admitted.
"They're going to be literally across the road from us," he said. "There's no shipping costs involved."
Andover hired a Borealis veteran to help run its Norwegian business. Former Borealis manager Jan Johansen will head a sales office Andover plans to open in Oslo.
The European market is primed for more automotive plastics technology, especially with its increasing emphasis on recyclability and reduced weight in vehicles, Kennedy said.
The European Union already requires carmakers to keep their products' life cycles in mind. No more than 25 percent of a car's total weight can end up as landfill — and the government may tighten that restriction even more.