Compounder Vi-Chem Corp. of Grand Rapids, Mich., has been purchased by longtime manager Leonard Slott and his wife Emili.
The Slotts purchased the firm from Nicholas Plastics Inc., a profile extruder in Allendale, Mich. Leonard Slott said Vi-Chem's previous ties to Nicholas ``had created the perception of a conflict of interest with some potential customers.''
In a Jan. 28 phone interview, Slott added that some potential Vi-Chem customers competed with Nicholas in the profile extrusion market, and believed that buying compounds from Vi-Chem would be the equivalent of helping a rival. Slott said Vi-Chem and Nicholas always were run as separate companies.
Nicholas made up a majority of Vi-Chem's sales when the compounder was launched in 1982, but currently generates less than 20 percent of Vi-Chem's total. Vi-Chem will continue to be one of Nicholas' suppliers, Slott said.
``I sat down and talked with [Nicholas President] Terry Nicholas, and we both recognized that the situation was hurting Vi-Chem,'' Slott said. Selling Vi-Chem to the Slotts ``was the best solution - and really the only solution - that we came up with.''
Slott joined Vi-Chem as materials manager in 1985 and has served as the firm's vice president and general manager since 1996. He's now Vi-Chem's president.
Vi-Chem produces compounds based on PVC and thermoplastic elastomers, including thermoplastic vulcanizates and styrenic block copolymers.
The firm employs 85 and operates 60 million pounds of annual capacity on 10 extrusion lines in a 130,000-square-foot plant. Vi-Chem installed its second TPE-dedicated line in late 2003 and may add a third in late 2004.
No purchase price was disclosed in the deal. Vi-Chem also does not disclose its annual sales, but sales in fiscal 2004, which ends in April, are on track to be 15 percent higher than fiscal 2003.
About 90 percent of Vi-Chem's sales are into the automotive market. Slott said he hopes to diversify the firm's product mix. PVC compounds account for about 75 percent of sales, with the rest in TPEs.
Slott said he wants to grow Vi-Chem's international sales reach and research and development capabilities. The firm is expanding its sales force in the Southeast and Northeast, as well as in Canada and Western Europe. Those moves should add two new sales representatives in 2004.
Vi-Chem also will focus on its new partnership with Belgian manufacturer Limburgse Vinyl Maatschappij to promote proprietary materials for slush molding products to the North American automotive market.