Techmer PM LLC's plans to grow its Asian business have taken a big step forward through a production deal with Guangzhou Eastern Rainbow of Guangzhou, China.
Techmer, a Los Angeles-based color concentrates maker, will supply Eastern Rainbow with its formulations and, in some cases, advanced additive packages. Eastern Rainbow then will make concentrates based on polyolefins, styrenics and engineering resins for the injection molding, film and fibers markets, according to Techmer President John Manuck.
``In the last year or two, a significant number of our customers wanted us to supply them in China with products made locally in China,'' Manuck said Nov. 5 by telephone. ``It would have been tough for us to build a new plant there, so we decided we had to find the right partner.''
Eastern Rainbow produces color concentrates at plants in Guangzhou and two other Chinese locations. The firm is owned by Far East Plastic Colours of Hong Kong, a family-owned business with more than 40 years of color experience.
Techmer reached a similar deal with Ciba Specialty Chemicals earlier this year, but that deal was limited to plants in Malaysia, Australia and New Zealand.
``It's good to have someone who knows the local business on our team,'' Manuck said of the deal with Eastern Rainbow.
The two firms will share revenues and profit from Chinese sales of Techmer concentrates. Manuck said the deal also gives Eastern Rainbow access to more-advanced additive products, including flame retardants, ultraviolet-light stabilizers and gamma stabilizers.
In addition, Eastern Rainbow should provide Techmer with sizable opportunities for nonwoven fibers in the personal-hygiene market.
Techmer, which employs 500 at five U.S. plants, is on track to post sales of $130 million for the third consecutive year in 2003. Manuck said the firm's sales volumes have increased, but a deflationary climate has kept selling prices down.