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December 16, 2002 01:00 AM

Reko to grab majority share of Superior

Joseph Pryweller
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    Reko International Group Inc. is adding injection molding to its toolbox of services by agreeing to purchase a majority share of Superior Plastics Inc.

    The acquisition, due to be completed by Jan. 31, blends the skills of longtime toolmaker Reko with the veteran Tier 2 custom molder, started in 1968 by owner Norman Mackie. Mackie will retain a 20 percent interest in the company, while Reko will own the other 80 percent.

    The purchase fills a void at the Canadian tooling shop. In recent times the injection mold builder has expanded into such areas as metal-cutting machining centers, automation technology, fixturing, prototyping, assembly and metal hydroforming.

    Injection molding has become almost a necessity for some large tool shops. One of Reko's automotive-based competitors, Delta Tooling Co. of Auburn Hills, Mich., bought an interest in a minority-owned injection molder in May.

    And blow mold maker Wentworth Technologies Co. Ltd. of Mississauga, Ontario, has a separate division devoted to thermoforming.

    ``You're going to see more of it,'' said Gordon Young, chief operating officer of Oldcastle, Ontario-based Reko. ``There's a push to take on business from customers, who are shifting responsibility to their suppliers. Our industry is changing, and we need to be where our customers want us.''

    Reko currently limits molding mainly to tool sampling at its Oldcastle campus, Young said.

    Superior, based in Rochester, Mich., will boost those capabilities. The company operates four facilities on a campus in the Detroit suburb. The company primarily molds and assembles automotive interior trim, exterior ornaments and functional parts, said Superior operations director Bruce Renny.

    The company has 27 presses, with clamping forces of 75-1,500 tons, and about 160 employees, Renny said. The custom molder recorded about $30 million in sales last year, he said.

    Reko will give Superior the needed marketing push and higher profile of one of the automotive industry's well-respected names, Renny said. The purchase also helps a company nicked, like others, by competitive pressures and thinning profit margins in the auto sector, he said.

    ``We've realized steady growth, but it's been challenging for everyone,'' Renny said. ``It's becoming more common for us to supply a greater level of service and a more complete package to customers. This helps us achieve that, and we're very excited about it.''

    Yet, the acquisition could face potential minefields if Reko customers view Superior as competition. The toolmaker will avoid that, Young said, by using Superior to take on overflow work from its existing customer base.

    ``We're not in the market to compete against Lear [Corp.] and Magna [International Inc.],'' Young said. ``We're in a better position to help them.''

    The company also will use Superior to work with Asian partners that need molding support, Young said. Reko has an arrangement with one unspecified Asian tool shop that has sites in China and Korea, and wants to quote large programs to automotive suppliers, Young said.

    Reko also is looking for nonautomotive work, another factor that plays into its need for a molder, Young said.

    The Canadian company has been busy of late on the acquisition front. On Dec. 4, Reko agreed to buy a 49 percent interest in The Mold Co., a minority owned injection mold maker in Romeo, Mich. Reko plans to rename the venture TMC.

    Reko, publicly traded on the Toronto Stock Exchange, recorded sales of C$75 million (US$48 million) in fiscal 2002. Superior will continue as a unit of Reko under the same name, Young said.

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