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April 17, 2000 02:00 AM

Royal consolidating 21 plants into 14

Shannon Ledson PLASTICS NEWS STAFF
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    WOODBRIDGE, ONTARIO — Royal Group Technologies Ltd. is changing its 30-year-old manufacturing philosophy to be in sync with today's technological advances. A new, 205-acre industrial complex will include 14 plants with 4 million square feet of manufacturing space. The new plants will replace 21 existing facilities spread around the Toronto area.

    The project signals a change in the profile and pipe extrusion company's long-held principle that smaller plants allow for better communication among employees, said Vic De Zen, the company's founder, president, chairman and chief executive officer.

    "Technology has changed so much, you can do it now with larger plants," he said.

    The industrial park is under construction across the street from Royal's headquarters in Woodbridge.

    Royal will sell the 21 existing facilities following the move, De Zen added.

    Moving into larger plants will provide room for each company under the Royal umbrella to expand without having to build additional plants or double up on management, De Zen said.

    "When you have two or three or four plants under one company, it's not good. You cannot run a proper business," he said.

    Having numerous businesses close together also will allow Royal to standardize each plant, giving it the ability to move parts and production from plant to plant, said Mark Badger, vice president of corporate communications.

    "It's good to have them in clusters [because] you have a very flexible organization," he added.

    The new complex will include manufacturing headquarters for Royal Group subsidiaries Royal Plastic, Majestic Plastic, Dominion Plastic, Royal Dynamics, Ultimate Plastic, Imperial Plastic, Roytec Vinyl, Regal Plastic, Crown Plastic, Royal Outdoor Products, Yorkview Plastic and Pillar Plastic.

    A centralized, 500,000-square-foot warehouse and distribution facility will serve as the core of the complex, according to Badger.

    At a company the size of Royal Group, expansion runs on a continuous cycle. De Zen said nearly 2.5 million square feet of space and several plants already have been built on the site. He expects the move to be complete by year's end.

    "We'll keep moving each day, [which is] really unique for us because we build the machinery," he added.

    Though existing machinery will be moved to the new plants, Royal's own tooling business is building additional machinery to be added during the next five years, De Zen said.

    Royal has other expansion projects under way. Last year, Royal bought 68 acres in Reno, Nev., where it plans to build a 335,000-square-foot plant later this year to produce vinyl window profiles, and fencing and decking boards.

    The facility will replace Royal Sierra Extrusions Inc. in nearby Sparks, Nev., and will be nearly double the size of the existing plant.

    The expansion "will allow Royal to keep pace with the strong growth in demand" in the Southwest, De Zen said.

    Royal's Woodbridge compounding plant saw a 50 percent increase in capacity in 1999, while its Texas compounding facility nearly doubled capacity, he said.

    Royal, which is known for its extensive vertical integration, also has a PVC recycling facility. Capacity at that plant was at 50 million pounds last year and already has been increased to more than 100 million pounds a year.

    De Zen's plans include another boost, to 200 million pounds by the end of 2000.

    "Our growth is really, really strong and we don't have a problem with growing over 20 percent," he said.

    Royal is known for its long list of building products. However, a new product line soon will hit retailers, targeting an entirely different audience: pets. The firm has introduced its own line of pet products including dog houses and cat litter boxes made of polyethylene and polypropylene, De Zen said.

    The new line is being injection molded at Royal's Gracious Living plant in Woodbridge, Badger said. Gracious Linving also manufactures home and garden amenities such as patio furniture and storage boxes.

    Royal acquired Gracious Living Industries Inc. in 1998 and built a new plant for the business that year. The facility now houses 50 injection molding machines, he said.

    Royal reported C$1.2 billion (US$877 million) in 1999 sales. The company placed first in Plastics News' ranking of North American pipe, profile and tubing extruders, with estimated 1998 sales of US$690 million.

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