H. Heller & Co. Inc. has nearly doubled its compounding capacity by acquiring American Thermoplastic Co., the Houston-based compounding unit of Phillips Petroleum Corp. The purchase adds 250 million pounds of capacity to White Plains, N.Y.-based Heller, which already operates a 170 million-pound-per-year plant in Visalia, Calif., a 75 million-pound-per-year plant in Channelview, Texas, and a 30 million-pound-per-year plant in Houston.
The newly acquired ATC plant in Houston compounds high and linear low density polyethylene, as well as polypropylene, for use in high-pressure gas pipe, drip irrigation pipe, geomembranes and rotational molding applications.
"This is a good move for us," Heller President Lloyd Heller said. "It adds synergy to our other facilities and gives us more volume."
Phillips sold the plant because it was no longer one of the firm's core assets, Phillips spokesman Fred Ramos said. Heller will continue to do toll compounding for Phillips at the site, he added.
ATC also will continue to be a supplier to Phillips' Driscopipe pipe-extruding unit, based in Richardson, Texas.
ATC's product mix is similar to Heller's other two plants. The Visalia and Channelview sites also compound PS, while the Visalia plant compounds PVC as well. The firm has plans to add PVC compounding ability to all of its sites.
Heller's other Houston plant is primarily devoted to toll compounding of rigid PVC. Heller does toll compounding in Visalia and Channelview as well, but a majority of capacity at those plants and at ATC will be used for proprietary compounds.
Lloyd Heller declined to release the sale price of ATC or sales figures for his privately owned company. ATC will be operated as a separate company, although it will share ownership with H. Heller and the California and Texas plants, which also are operated as separate companies.
The California plant does business as Heller Performance Polymers Inc., while the Texas plant is called as Gulf Performance Polymers Inc. The existing Houston plant operates as Polyscience Inc.
The original H. Heller & Co. is a distributor of prime and off-spec resin grades, primarily commodity materials such as PE, PP, PS, PVC, ABS and PET.
H. Heller was founded by Lloyd Heller's father Herbert in 1976 after Herbert wrapped up a 35-year career as part-owner of H. Muehlstein & Co., a resin distributor and broker based in Norwalk, Conn. Herbert Heller remains active with the company as its chairman and chief executive officer.
The new firm made its big move into compounding in 1990 when it bought the California plant from British Petroleum plc. It then bought the Texas plant from Chevron Corp. in 1995.
Heller is looking at adding capacity at ATC, which employs more than 100, as well as at its other sites. Expansion into other parts of the United States, as well as international opportunities, also are being evaluated.
Heller is confident its distribution experience gives it an advantage in compounding commodity resins, even though many other compounders are trying to focus on higher-margin engineering resins.
"We know the cost of the raw materials," Lloyd Heller said. "To compete in this business, you have to know the market, and we have that experience."
The recent compounding megamerger proposed between M.A. Hanna Co. of Cleveland and Geon Co. of Avon Lake, Ohio, caught Heller's interest because the merged company would have a similar product mix to what H. Heller currently offers, Lloyd Heller said.
"[Geon/Hanna] will be doing everything we're doing, but they'll be much larger," he said. "We're a leaner, meaner version of them."
