ABC Group Inc. has increased its blow molding stake in the United States by purchasing a plant from LDI Inc. that opened less than two years ago.
LDI had moved its blow molding operation to the Grand Rapids, Mich., plant in July 2000 due to space limitations at a nearby facility. On Dec. 31, Toronto-based ABC purchased the assets of LDI's 75,000-square-foot manufacturing site for an undisclosed price.
ABC leased additional space adjacent to the site for a total of 115,000 square feet in Grand Rapids. The company plans to expand the plant in midyear, adding more than twice the number of employees now there, said ABC spokeswoman Jane Leong.
The move helps ABC, an automotive supplier of fuel, interior, fluid-management and under-hood systems, meet capacity needs and shifts operations closer to its customers. The company plans to add air-induction systems in Grand Rapids, where the products are not currently made.
In the United States, the company also makes air-induction products, including vehicle air ducts and bellows, at a plant in Fremont, Ind.
The former LDI plant also makes molded windshield-washer reservoirs and tanks, interior components and some consumer products.
``We worked on this extensively over the holidays,'' Leong said. ``We did not have a manufacturing facility in Michigan, only a sales office. We had to move nearer to customers.''
ABC, which has more than 35 plants and 4,000 employees worldwide, wants to turn the Grand Rapids plant into a world-class operation for air systems, Leong said. By July, the company will have as many as 15 blow and injection molding machines at the plant, up from the nine machines currently there.
The machines currently perform both dual- and single-shot blow molding and include dual-color capabilities. Testing equipment also will be added.
The Canadian company will increase employment from about 80 people now to 175 by July, Leong said. The company could not speculate on the size of the projected investment at the plant, to be called ABC's Undercar Products Group Inc.
The move by ABC is part of a recent global expansion into various markets and regions. In September, the company opened a second injection and blow molding facility in San Juan del R¡o, Mexico, doubling its production capacity there. The new facility, part of the Grupo ABC de Mexico subsidiary, occupies 110,000 square feet.
And in December, the automotive supplier completed an expansion of its plant in Dieburg, Germany, adding 60,000 square feet of space to double capacity. The facility, under the ABC Automobil-Formteile GmbH name, makes blow molded under-the-hood systems and components.
ABC ranked 10th on Plastics News' list of North American blow molders in fiscal 2001, with $370 million in relevant sales.
LDI's owners, brothers Steve and Gregory Lankfer, saw ABC's interest as an opportunity to grow its core motorized and solenoid actuator business, said Chief Executive Officer Steve Lankfer.
The Grand Rapids-based company recently received new contracts for the electromechanical switches and assemblies and wanted to reduce debt to expand in those areas, he said. One new program involves making a lift-gate clutch assembly for an automated, sliding van door, Lankfer said.
``One reason we did this was to allow us to have the cash to expand in actuators,'' he said.
The company also plans to expand its core injection molding operations. The company molds interior trim and lighting components and assembles some of those parts with its electrical switches in door and trunk panels.
LDI has 12 injection presses and more than 200 employees at its two Grand Rapids facilities, Lankfer said. Its blow molding business started in 1991 with one machine in a small, cramped facility, he said. The company invested $4 million to move to the larger plant in 2000.
LDI expects to record more than $20 million in sales this year, Lankfer said. That figure could rise to $25 million in the next 18 months, with new programs on the way, he said.