British plastic bottle and flexible tube producer M&H Plastics Ltd. plans to start its first U.S. manufacturing base on the East Coast in the first half of 2004.
The move comes a little more than four months after the privately owned blow molder, which serves the personal-care sector, was acquired by its management along with JP Morgan Partners, the private equity arm of JP Morgan Chase & Co. The value of that deal, completed in March, was not disclosed.
M&H of Beccles, England, has been selling in the U.S. market since 1994. The company did not reveal where its new plant will be, but confirmed it is evaluating sites in Virginia.
``Local demand, coupled with the need to offer existing European customers a U.S. manufacturing base, have resulted in the decision to proceed with this new venture,'' the company said in a news release.
M&H, with annual sales of 45 million ($72.7 million), runs one 450,000-square-foot plant in Beccles with capacity to make about 300 million bottles and 200 million injection molded closures per year.
Since 1999 the firm has manufactured flexible polyethylene, monolayer tubes for a range of personal-care products. Currently, it produces 25 million tubes a year with two extrusion lines and has plans to buy a third as demand grows, according to marketing manager Shaun Catchpole.
Strong U.S. demand for European-style packaging, along with moves by two European M&H customers to fill bottles in North America, prompted the molder's U.S. expansion plan, Catchpole said.
M&H intends to invest about $10 million in its U.S. operation during the next three years. It already has appointed a managing director to run the plant and initially will employ 15-20, he said.
The facility is to start production in the second quarter. In the first year it will be equipped with six extrusion blow molding lines and four printing lines. More capacity will be added in the second year of operation, Catchpole said.
M&H plans to mold bottles as large as one-half liter for shampoos, bath and hair products. Shipping closures from the United Kingdom still is competitive, he said.
In the United Kingdom, the company extrusion blow molds bottles up to 30 ounces from polyethylene, polypropylene, PVC and glycol-modified PET. The company also injection stretch blow molds PET bottles.
It operates about 50 extrusion blow molding lines and 15 injection stretch blow molding machines. M&H manufactures a variety of closures on injection presses with clamping forces of 22-100 tons, he said. The firm also designs and builds molds.
Three years ago, M&H, which sells its containers in 30 countries, formed an alliance with U.S. plastic jar molder Delta Plastics Inc. of Hot Springs, Ark. Under the agreement, M&H markets Delta's PP and polystyrene single- and double-walled jars and closures in Europe.
The British molder reached another agreement two months ago with Warsaw, Poland-based jar manufacturer Anpack to market and distribute the Polish firm's heavyweight single- and double-walled jars in Britain and other selected European markets. More designs and sizes will be added to the range.