The British entrepreneur who owns the former Daicel Chemical Industries Ltd. compounding businesses has leapt into machinery distribution and is exiting toll compounding.
The company also has expanded its engineering resins portfolio and plans to move its U.S. compounding operation out of New Jersey by spring.
Chief Executive Officer Keith Carrington runs Clayfield Management Ltd., a British holding company. Businesses under the umbrella include the former Daicel compounding operations, now known as PlastxWorld Inc. in Wharton, N.J., and PlastxWorld Ltd. in Milton Keynes, England; plus e-commerce Web sites PolymerMarketPlace.com and 1stMachinery.com.
The newest business is equipment distributor PlastxWorld Machinery Ltd. in Milton Keynes. The unit launched operations a couple months ago by agreeing to distribute in Europe auxiliary equipment from Baltimore-based maker Novatec Inc. The two firms shared booth space at Interplas in Birmingham, where PlastxWorld displayed a Novatec NovaDrier-brand dryer.
Jack Doub, Novatec executive vice president, noted that his firm has had several false starts going back a number of years in trying to gain traction in Europe. It erred in part, he said, by relying too heavily on technical types to try to sell. But he's convinced this arrangement is going to work.
``These people know how to sell - they're sales guys,'' he said.
Carrington, meanwhile, also has expanded his materials portfolio. He announced at Interplas that PlastxWorld has agreed to distribute engineering polymers from South Korea's Cheil Industries Inc. in the United States, United Kingdom and Ireland. He described Cheil as the world's fourth-largest maker of ABS resin, with a strong position in the computer-monitor market.
``Cheil has a very active compounding program,'' he said. But he noted his firm will continue to look for similar alliances.
Carrington, who ran the Daicel compounding plants before buying them out, said he is busy downsizing and restructuring PlastxWorld's New Jersey plant.
``We did toll compounding for large resin makers, and we're getting out of it,'' he said. That business accounted for well over half of the firm's sales, but simply was too unreliable and unprofitable, he said. He said his remaining, core compounding businesses now generate annual sales of about $12 million, but he is gunning for $20 million in 2003.
The oversized Wharton plant covers 83,000 square feet and has nine extrusion lines. Carrington believes the optimum size for a compounding plant is no larger than four lines. He currently is researching possible sites for his new U.S. plant, which will cover 25,000-30,000 square feet and start with three twin-screw lines.
One thing is sure: He wants out of New Jersey, where he describes the cost of doing business as ``punitive.'' Likely sites are in the Southeast, but Carrington has not ruled out eastern Pennsylvania and other neighboring locations.
``Our U.S. plans depend on my assessment of the budget and prospects.'' But, he quickly added, ``We will exit our [New Jersey] plant no later than first-quarter 2003, even if we have to move into temporary facilities.
``I believe in the McDonald's approach to compounding,'' he said, meaning he would rather replicate small, identical plants than run a large facility. PlastxWorld's current, 25,000-square-foot, three-line plant in the United Kingdom, which he said is ``bursting at the seams,'' will provide a model for the planned U.S. plant.
Carrington believes the future is in all twin-screw compounding. In England, he noted, ``We've got some great single-screw technology, but it's historic.'' The new U.S. plant may use Chinese-made twin-screw lines.
Another business possibility, he said, is ``setting up an independent company to offer consulting for compounding, for such things as screw design.''
Carrington said he's worked for large firms his entire life, but he's better suited for entrepreneurship.
``I'm an Internet nut, an innovator. I just love stretching the edges. We just want to be a different kind of company.''