Industrial blow molder K&M Plastics Inc. has sold its water-treatment tank business to Pentair Inc. and plans to shutter its plant by the end of August.
K&M is attempting to sell its remaining custom blow molding equipment before it closes, K&M President Michael Micallef said July 8. An outside chance exists that a buyer would purchase K&M's 100,000-square-foot facility in Elk Grove Village, Ill., and keep the company operating, he said.
But that possibility is remote, he said. Closing K&M would affect the jobs of 75 employees.
``There's always a chance that could happen,'' Micallef said. ``But most companies think it's a good idea to consolidate a business at their existing location. Until we [close], we'll work with Pentair to make the transition easier on customers by making products for them for a couple of months.''
Pentair paid an unspecified amount July 3 to buy certain assets of K&M. The Golden Valley, Minn., company will gain K&M's blow molding machinery used to make residential and commercial brine tanks and cabinets and its pressure-vessel product lines.
Pentair will move two shuttle blow molding machines to its Chardon, Ohio, plant. Other K&M equipment will move to Pentair's Asia operations, including a plant in Suzhou, China, Lamps said.
The equipment Pentair is keeping primarily is used to mold polyethylene housings and liners for water softeners and for other water-treatment and filtration equipment, Micallef said. The products are blow molded and overwound with continuous rovings of fiberglass and epoxy, he said.
The acquisition will add new product designs and sizes to Pentair's existing brine tank line, said Mark Lamps, vice president of operations for Pentair's water-treatment business in Chardon. Pentair added its own line of blow molded brine tanks in early 2002, Lamps said.
Water-treatment products represented about 80 percent of K&M's business, Micallef said. The blow molder still owns about seven machines and other assembly equipment for its custom business, said Nick Genua, an investment banker with Fort Worth, Texas-based Buis & Co. who is handling the sale of K&M's assets. The custom business includes products for automotive and industrial applications, Genua said.
The decision to close K&M's plant was made earlier this year by parent company JMK International Inc. of Fort Worth, Micallef said. K&M records between $8 million and $10 million in sales annually, he said.
A few larger competitors dominated the water-treatment business and made it difficult to compete, Micallef said. In custom blow molding, declining sales and profit margins were hurting the business, he said.
``It's gotten very tough,'' Micallef said. ``And we're not working in a low-cost area [of North America] for production.''
JMK, a holding company with silicone-rubber operations and investments in restaurants and food products, has owned K&M since JMK's creation in 1976. Micallef's father, Alfred, one of JMK's founders, had worked with K&M since the 1960s, when the company launched its tank products, he said.
K&M President and Chief Executive Officer Charles Poellet died unexpectedly May 14. The decision to close K&M was made before Poellet passed away, Micallef said.