Flexible packaging company AEP Industries Inc. is bringing its higher-end PVC film business to North America, part of a major expansion costing $17 million.
AEP, based in South Hackensack, will start manufacturing unplasticized PVC film - a specialized, scratch-resistant product that can substitute for cellophane - at its PVC film plant in Griffin, Ga., later this year. AEP's Fiap SpA subsidiary already makes the material in Europe.
AEP plans to add 50,000 square feet to its Griffin plant, already its largest production site, and install an extrusion line specific to the unique twist-wrap and lamination film, said John Powers, executive vice president for sales and marketing.
The expanded facility will have space to add four extrusion lines for the film as the North American business develops, he said. The company initially will invest $12 million in the building and equipment in Griffin. The project is due to be completed by November.
Meanwhile, AEP is adding 25,000 square feet to its Chino, Calif., plant within the next nine months, Powers said. After the expansion, the plant will produce construction and agricultural film. AEP had not made those specialized films on the West Coast, Powers said.
AEP plans to invest about $5 million in the Chino expansion and add two or three extrusion lines, Powers said.
The moves complement AEP's goal of growing with a broad mix of film product lines, Powers said during a June 4 interview at company offices.
``Some of our biggest gains have come from national accounts,'' he said. ``We can bundle up many film products for one customer, who now only has to go through one source.''
That philosophy has served AEP at its 21 plants and its variety of markets in shrink and stretch films. It expects to record about $700 million in sales in 2002, up from $640 million in 2001.
Some of that growth has come through acquisition, including its 1996 purchase of Fabbrica Italiana Articoli Plastici SpA, or Fiap, of Turate, Italy. Fabbrica, located north of Milan, has been a major producer in Europe of sophisticated PVC film used for twist wraps for candies and candles, the covers of battery labels and laminated coatings for credit cards. In Italy, it makes PVC food wrap and converted and printed films.
AEP has imported as much as 6 million pounds per year of Fiap's blown extrusion products into North America, Powers said.
The Griffin plant currently has about 330,000 square feet and makes a host of PVC shrink and stretch films for other applications. The expansion is the facility's third in recent years.
AEP also decided to start making construction and agricultural film in Chino, a plant that now has 115,000 square feet of space. AEP currently makes film for the agriculture and construction markets, including heavy-duty construction bags and can liners, at its facility in Waxahachie, Texas. That plant will continue to make those custom films.
``Customers in California were asking for [construction and agricultural film] shipped from a closer location,'' Powers said.
The company will continue to look for acquisitions in its core flexible packaging market.