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July 09, 2001 02:00 AM

Prolite builds business on dual laminates

Joann McKinlay SPECIAL TO PLASTICS NEWS
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    PORT COQUITLAM, BRITISH COLUMBIA - Prolite Plastics Ltd. got cold feet last year when it was about to buy a similar-size competitor, but that isn't stopping the firm from claiming it is on the way to being No. 1 in the specialty field of dual-laminate piping and tanks.

    Dual laminate means two layers, in this case plastic and fiberglass. The plastic base is made from a fluoropolymer or other resin that does not react with corrosive acids or solvents. That material is chemically bonded or welded to the fiberglass, which provides mechanical support.

    Last summer Prolite signed a letter of intent to buy the Norcore dual-laminate tank facility in Tacoma, Wash., just over the border from Prolite's headquarters in Port Coquitlam, near Vancouver. Raven Industries Inc., which is based in Sioux Falls, S.D., had purchased Norcore Plastics Inc. in 1997.

    Raven was looking for a buyer for its plastic tank business to focus on its more profitable film business. But in early April Prolite pulled out.

    Guyle McCuaig, Prolite president of international development, said the Norcore facility's contract with Intel Corp. was possibly the largest single contract in dual laminates worldwide, but Prolite backed off because it sees the microelectronic supply business as ``volatile and dangerous.''

    With the demise of the agreement, Raven continues to look for buyers for that facility, said Tom Iacarella, Raven vice president of finance. Norcore generated more than US$5.5 million in sales last year, he said.

    Prolite currently has estimated sales of C$7 million (US$4.5 million). If Prolite had bought the facility, it would have become the largest dual-laminate company worldwide in terms of annual sales, McCuaig said.

    But Prolite doesn't have far to go to become No. 1, as there are few companies in the niche industry. The Dual Laminate Fabrication Association only has 12 members listed on its Web site, and three of those are suppliers.

    McCuaig, who is DLFA vice president, figures that Prolite is about the same size as two competitors in Canada and two or three in the United States. One or two in Europe may be larger, he said.

    The majority of Prolite's clients are chemical and mining companies that build copper smelters, zinc refineries, chlor-alkali and bromine plants that use highly corrosive materials. Worldwide, he estimates the clients for dual-laminate material to be 35 percent hydro metallurgy (part of the mining industry), 40 percent chemical processing, 15 percent wafer-fabrication facilities for companies like Intel and 10 percent between the pulp/paper and metals-finishing industries.

    The dual-laminate industry began in Europe about 40 years ago and has been operating in North America for about 20 years. DLFA estimates the size of the North American industry at about $50 million in sales per year, and $150 million in Europe, McCuaig said

    McCuaig maintains that Prolite will be diversifying and expanding. It already has an alliance and work-sharing arrangement with fiberglass company IPP-Plastics USA Inc. in Lake Charles, La.

    Once the semiconductor sector has recovered, ``we'll be getting back into the microelectronics business, either from this facility, or acquiring another fabricator,'' McCuaig said. He declined to say whether Prolite would bid again for Norcore.

    Even without mergers or plant acquisitions, Prolite hopes to double sales and reach US$9 million by 2003.

    ``There's supposed to be a recession on, but I have never personally been busier than we are right now,'' he said.

    He pointed out that almost 90 percent of Prolite's work is maintenance and repair of existing plants, not speculative capital ventures. One exception is a project for Hudson Bay Mining and Smelting Co. Ltd., which is expanding its zinc mining facilities in Flin Flon, Manitoba. For that project, Prolite had to do a study of how dual-laminate products work in temperatures of minus 40° F.

    Prolite estimates 5 percent of its sales are in British Columbia, with 30 percent in Canada. Forty percent are to the United States; 10 percent each to Asia, South America and the Middle East.

    DLFA estimates the use of dual laminates has been growing 7 percent annually.

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