Tessy Plastics Corp. has picked up a big, new custom molding contract that will help offset recently lost business.
Tessy has signed a multiyear deal to supply vacuum cleaner parts to Electrolux Corp. of Bristol, Va. The Elbridge, N.Y., custom molder expects the work to amount to nearly $10 million a year. Tessy said it will use about 400 Electrolux molds in the program.
The deal, finalized the week of July 16, came at a propitious time for Tessy. Its Lynchburg, Va., plant, stung by losing a big customer, will have initial responsibility to fulfill Electrolux orders. Lynchburg laid off about 100 workers after Telefon AB LM Ericsson announced late last year that it was exiting cellular telephone manufacturing and giving the work to contract manufacturers. Much of Tessy's Lynchburg plant's output consisted of making parts for Ericsson's cell phones. Ericsson's business once accounted for about 80 percent of Lynchburg's orders, but the molding plant has retained only a small fraction of specialty molding for Ericsson.
An Elbridge plant also did work for Ericsson, but it is less affected because its customer base is more diverse than Lynchburg's.
Tessy President Henry Beck said in a telephone interview that his firm will buy some of Electrolux's presses to handle the new workload. Electrolux had been doing its own injection molding but decided it could make better use of that plant space. Tessy is setting up a just-in-time supply program with Electrolux. The Lynchburg operation is about a three-hour drive from Electrolux's Bristol assembly facility.
Tessy also took a hit when its plants in Elbridge, Ireland and China lost a major customer that dropped out of the market for computer printers. Beck said Elbridge and the Shanghai, China, molding operations have a good chance of capturing new business, but the facility in Dundalk, Ireland, has no prospective replacement business lined up at this time.
Tessy received Plastics News' Processor of the Year Award in 2000, a year in which its injection molding sales grew 17 percent to $76 million. Beck declined to estimate sales for 2001 because of too many uncertainties in its order books.