Temporarily derailed by the sliding Brazilian economy, KlÃ¶ckner-Pentaplast of America Inc. is back on track to open its first extrusion plant in Brazil.
In late 1999, the film and sheet supplier had announced plans for a landmark, 500,000-square-foot plant in Salto, Brazil, near Sao Paulo, and planned to invest $20 million to build the facility and add equipment.
Opening in phases, the plant was expected to begin with one calendering line and then add extrusion for amorphous and glycol-modified PET film and sheet. KlÃ¶ckner, based in Gordonsville, Va., had eyed the Brazil market as a huge opportunity to expand its consumer products, many of which are thermoformed from KlÃ¶ckner's PVC, acrylonitrile and PET sheet.
But after the first blush of excitement, reality intervened. The plant was scheduled to begin operating in late 2001. But between the announcement and the start of construction, Brazil suffered through skyrocketing inflation, an energy crisis that forced a national emergency, soaring interest rates that restricted loans and a grounding of Brazil's currency, the real.
All of which led many companies to cut back on investment in Brazil, and exports declined. So did KlÃ¶ckner's interest in rushing a new plant to serve that market.
But the Brazilian economy has come back, at least to the extent that a plant is viable, said Peter Gianniny, KlÃ¶ckner business manager for thermoforming films. Gianniny was interviewed at the Society of Plastics Engineers' 2003 Thermoforming Conference, held Sept. 13-16 in Cincinnati.
The plant will start with a PVC calendering line when it opens in the spring, with an expansion set for soon after that could add coextrusion capabilities, he said.
``In the U.S., we're a strong PVC company,'' Gianniny said. ``We'd like to develop the Brazilian market for that. There are a number of products that can be introduced, but we do not have a PVC presence yet in Brazil. We've seen it as an area for exploration in the past, but now we think it's time to move forward on it.''
The calendering line could produce as much as 30 million pounds annually of PVC resin for film and sheet uses, Gianniny said. The company also would like to add PET capacity in the country in the future and build a strong base in Brazil, he said.
KlÃ¶ckner has benefited in North America from its packaging sheet lines with PET, Gianniny said. Amorphous and glycol-modified PET and coextruded resins have been used considerably for a variety of new consumer products, both in blister packaging and clamshell designs.
While PVC still is a popular sheet material, PET-based materials are growing at a fast clip, Gianniny said. The materials offer a better recovery rate in recycling than with PVC and transparency for displays of several products inside one package, he said.
In South America, though, PVC still reigns supreme as the package material of choice, Gianniny said. Other applications in the medical and pharmaceutical industry also are driving some of the growth there, he added.
The company already has a 54,000-square-foot calendering operation in Villa del Totoral, Argentina, that forms rigid PVC sheet for packaging. The facility, launched in 2000, primarily serves the internal market and does not do much exporting to other South American countries, Gianniny said.
The Brazil operation, in contrast, could export film and sheet to other parts of Latin America, he said. The company already has a service center in Sao Paulo.
KlÃ¶ckner spokeswoman Nancy Ryan said more information on the Brazil plant will be available within the next several weeks, once officials from the expected Brazil plant meet in Gordonsville. KlÃ¶ckner-Pentaplast is a unit of KlÃ¶ckner-Werke AG, based in Duisburg, Germany.
The company ranked 15th on Plastics News' listing of film and sheet manufacturers, with an estimated $400 million in North America extrusion sales last year. The company also operates six U.S.-based plants.