Entec Engineered Resins has stayed busy in the early part of 2003 by acquiring a smaller distributor in California and completing a 30,000-square-foot expansion of its compounding plant in Manchester, Tenn.
Entec, based in Maitland, just north of Orlando, completed its purchase of West Coast Polymers on Jan. 1. West Coast Polymers of Los Alamitos, Calif., posted sales of $20 million in 2002 and has a product mix similar to Entec's. Both firms distribute engineering resins for BASF Corp.
West Coast owner David Goldstein will continue to run that business, which employs 15. No purchase price was disclosed.
Adding West Coast Polymers ``is really part of our geographic strategy,'' Entec President David Der Hagopian said in a Feb. 25 interview in Maitland. ``This really strengthens our presence in that part of the country.''
The Manchester expansion added 30,000 square feet to a 125,000-square-foot facility. The project included a fifth twin-screw extrusion line, doubling the size of the site's lab and installing new lab equipment.
The Manchester site, which opened in 1997, has an annual capacity of 60 million pounds, based on a five-day work week. The facility primarily compounds nylon and ABS, but also does work in polycarbonate and PC-based alloys. About half of the plant's output is in color compounds.
About one-third of Entec's 2002 sales of $125 million came from compounding, but Der Hagopian said compounding should make up half of that amount in the next two to three years.
``Our strategy is to sell more of our own products,'' he explained. ``We can make more profit on proprietary products and can control our own destiny.''
Automotive applications have been Entec's largest market for compounds.
``We're very interested in smaller [automotive] orders and applications that we can grow into bigger pieces of business,'' said John Chuplis, Entec executive vice president of sales and marketing.
Moving ahead, Entec's future is linked with that of Ravago NV, a distributor, compounder and recycler that acquired a stake in Entec in 1999 and now owns 49 percent of the firm. Der Hagopian and a handful of Entec employees own the remaining 51 percent.
Ravago, based in Arendonk, Belgium, ranks as one of Europe's three largest resin distributors and posted sales of about $850 million in 2002. Working with Ravago, Entec last year acquired Hinds Co. Inc., a Barberton, Ohio-based supplier of off-spec commodity resins.
``Ravago's strategy is to grow in America through Entec,'' Der Hagopian said. ``There's a good fit with the cultures and personalities of our two companies.''
Ravago America Corp., a Ravago-owned distribution, compounding and recycling business in Hempstead, Texas, will remain separate from Entec.
Combined sales of Entec, Hinds and West Coast Polymers should reach $250 million this year, according to company officials. Entec's sales climbed almost 30 percent last year, to $125 million, rebounding from a drop of almost 5 percent in 2001.
Der Hagopian said Entec's future growth could be in compounding, where it might make more economic sense to grow organically rather than to acquire a competing firm. On the distribution side, Entec recently began distributing BASF's line of polystyrene resins and plans to add polyethylene and polypropylene as well.
``The profit margins in distributing polystyrene aren't much different from engineering resins,'' he said. ``A number of customers had asked us if we could source commodity resins for them, so that's something we're going to offer to our current customer base.''
Entec's lineup of 11 suppliers includes Dow Chemical Co., Chi Mei Corp., Ticona and Ferro Corp. The firm uses 17 public warehouses across the United States and operates logistics centers in Manchester and Chicago. From a volume standpoint, ABS and nylon are Entec's top two distributed materials.
Entec, founded in 1985, employs about 200. Of that total, about half work in Manchester.