LNP Engineering Plastics Inc. plans to spend more than $40 million to expand facilities and acquire other firms in the next three years, focusing much of its attention on Asia.
LNP, which was bought by GE Plastics in January, said it plans to use the financial muscle of its new corporate parent to expand production in China and Malaysia and add new operations in a GE factory in Japan. The company also is expanding production in Mexico, Brazil and the United States.
Charlie Crew, the longtime GE executive recruited to run LNP, outlined the changes in a wide-ranging news conference Sept. 26 at the company's Exton headquarters.
The company, which reinforced its position as the second-largest compounder in North America as a result of the GE merger, also outlined plans to spend more than $60 million on research and development and beef up its product offerings by 2005.
The goal is ambitious. Crew, who is president and chief executive officer, said he wants to double LNP's worldwide sales, currently $400 million, by 2005.
To make that happen, though, the company faces challenges beyond the sputtering and soft manufacturing economy. LNP's patents on its long-fiber Verton composite technology, for example, expire at the end of this year, opening the door for more competition in one of its franchise products.
But officials announced some projects they hope will spur growth, such as a nod from Mazda to use Verton in front-end modules, the first time long fibers have been used in large auto parts in North America.
And they see opportunities to expand the market for plastics in areas such as hard disk-drive coils, where the company's Konduit brand of thermally conductive polymers let the drives operate at a lower temperature and thus run 30 percent faster.
``Fundamentally there is still a lot of metal to replace,'' Crew said.
Much of the growth outlined by Crew is anticipated for Asia. The firm plans to add an extrusion line in Malaysia early in 2003, two lines in Shanghai by the fourth quarter of this year, and local manufacturing in Japan by the first quarter of 2003.
The company also may add another plant in China and several extrusion lines in the second quarter of 2003 to serve burgeoning consumer-product, electronics and infrastructure applications.
LNP's North American growth, by contrast, will come mainly from automotive, although health care also will see growth with the installation of another twin-screw extruder at its Columbus, Ind., plant, said Carlos Carreno, president of LNP Americas. The company also is expanding production capacity by 50 percent in Mexico and has plans for a larger facility in Brazil.
Information technology accounts for about 40 percent of LNP's business worldwide. By 2005, Crew projects that segment still will be the firm's largest, but that it will shrink and automotive will grow.
While Crew said the merger is offering benefits, such as making GE Polymerland the exclusive distributor for LNP products, he acknowledged having to tread lightly around customer fears.
``I get questions all the time when I go to the field - is GE going to take LNP and swallow it, and will it disappear?'' Crew said.
He said the company will maintain its own sales force, commercial development and manufacturing, making it unique within GE Plastics, where specific products like Lexan do not have dedicated sales groups.
Crew said being part of GE is opening doors for LNP and getting it more involved with original equipment manufacturers in the design phase.