Schmalbach-Lubeca AG has announced a two-year, 200 million deutsche mark ($316 million) modernization program for its PET Containers Europe and Asia division. The project includes replacing more than 40 injection molding machines with new, high-output Husky presses.
Schmalbach also intends to expand its use of through-the-wall operations to supply blow molded bottles directly to the production lines of its customers. Already, the company runs five such facilities in Europe.
"We are replacing our existing machinery with higher-output, state-of-the-art injection machines to enable us to continue to supply our customers at competitive prices and at the same time, meet the challenges of the commodity sector," said George Moore, president of Schmalbach's PET Containers Europe and Asia division.
This follows a similar program in 1998 in Schmalbach's Plastic Containers Americas division, which resulted in a "considerably improved" performance, according to the Ratingen, Germany-based company.
Schmalbach would not disclose details about the blow molding machines, but Husky spokesman Chris Dohle confirmed that his company had won a US$21 million contract for 48- and 96-cavity injection presses.
Most of the replacement presses will be installed by this summer, according to Schmalbach.
The restructuring program is a "logical continuation" of measures to boost Schmalbach's competitive position in Europe, Moore added. Early last year the company reorganized manufacturing in France with the closure of a PET facility the transfer of production to plants in Dunkerque, France, and Brecht, Belgium.
Further improvements to production were made in plants in Spain and Germany, where injection machines were installed for preform molding, and in Eastern Europe. Meanwhile, a new PET bottle plant was commissioned in Morocco last year to handle the North African market for containers.
Schmalbach also invested in North America last year, establishing a modern production plant in Columbia, S.C., for soft drink bottles and commissioning a plant in Fairfield, Calif., for hot-fill containers.
Schmalbach is undertaking the latest investment even as its owner, Viag AG of Munich, Germany, is preparing to sell the packaging unit.
Nevertheless, Schmalbach is forecasting sustained high growth rates for PET containers globally. Last year, PET containers were the group's highest sales contributor, with a 43 percent share, followed by beverage cans representing 37 percent, Schmalbach said in its annual report.