Saint-Gobain Calmar is aiming for 4 percent increases in annual productivity to compete in the tough global market for nonaerosol dispensing and spraying systems.
``Prices are still going down, and notwithstanding what might happen with resin pricing - which will have to be passed on - the enormous pressures our customers have are lower prices,'' said John McKernan, president and chief executive officer of City of Industry, Calif.-based Calmar.
``We recognize that to keep our customers competitive, we have to keep pushing and pushing,'' McKernan said at WestPack, held Feb. 19-21 in Anaheim. ``At some point the U.S. capacity gets soaked up, and the European capacity gets soaked up. Now, the new threat is Asia.''
Chinese and South Korean suppliers reverse-engineer Calmar products, he said. Calmar established a plant in Wuxi, China, in 1998 and understands Asia's economics.
``But for very high-volume, very high-quality products, we don't think [Asia] necessarily brings an advantage in the long term,'' he said. Calmar uses ``big, fast, highly automated'' processes to make core products largely in North America.
The firm plans to make some investments to ``get even closer-aligned to true lean manufacturing.''
Calmar mainly makes dispensers and sprayers for personal-care products and trigger sprayers for household chemical products and is growing in specialized sprayers for the pharmaceutical and fragrance markets.
``Our plant in [Barcelona,] Spain has a pretty significant fragrance business, and in [Hemer,] Germany, we have a reasonable-size pharma business,'' McKernan said. ``We've made huge investments in the last two to three years'' in Germany with a Class 10,000 clean room for nonaerosol pumps, mostly for nasal sprays.
The firm is considering an acquisition. ``If we could find a good company in the pharmaceutical business, in particular, it would be a nice bolt-on to our business and get us there quicker than we are today,'' he said.
Calmar routinely reviews where each product line is manufactured, he said.
``We make decisions on whether we can part-automate even more and whether we can be viable long-term against what I would say is the Asian threat today, but 10 years from now will be the Indian threat.''
In some categories, Calmar decides on further automation. ``In other cases, where the volume may not justify it or the market may not justify it, we have shifted production outside the U.S., and we will do more as necessary,'' he said. Currently, some work is done in China and Tecate, Mexico.
``We are manufacturing in Tecate, and we will do more outside our own plants - not necessarily with core products, but definitely with some of the lower-volume products,'' he said.
Calmar customers include global players Colgate-Palmolive Co., S.C. Johnson & Son Inc., Procter & Gamble Co. and Unilever Group.
Calmar employs about 2,500 and had 2002 global sales of about $300 million. ``We are global, but 60-65 percent of our sales are in North America,'' he said.
Paris-based Cie. de Saint-Gobain purchased Calmar in 1998.