With new financing and a new owner in place, blow molder Madras Packaging LLC is embarking on expansion plans that will give the small packaging company a larger footprint.
The company, based in Charlottesville, Va., has a lot to discuss, now that it has reached a financing agreement with chemical and automotive-products company Old World Industries Inc. of Northbrook, Ill. Old World, which makes such items as caustic soda and antifreeze solution, acquired an unspecified stake in Madras on Feb. 3.
Old World Chairman Tom Hurvis and Madras President Harold Jordan have known each other since college at Lawrence University in Appleton, Wis.
Madras, founded in 1997, molds high density polyethylene consumer bottles, and recorded about $25 million in sales last year, Jordan said in a Feb. 5 telephone interview. Now Madras plans to open several new plants, expand machinery in existing facilities and move into the PET bottle market.
``The investment helps us get access to capital that a firm our size wouldn't normally have,'' Jordan said. ``A wide variety of potential customers are looking to put their well-being in our hands.''
The molder, a minority-owned company, has hit the radar screen with several new customers in its young history. While minority ownership has helped Madras get in some doors with customers such as Procter & Gamble Co., Jordan said that status does not win a molder more than a look if it does not have the capabilities to perform.
During the next 18 months, the company plans to add four to seven new blow molding machines in its two existing plants, in Atlanta and Argos, Ind.
In Atlanta, the company will expand its product mix to include dairy and industrial items, Jordan said. At both plants, the company will stick with extrusion blow molding, used to make HDPE bottles, and is looking at adding in-mold labeling technology, he said.
The company also wants to build at least two new blow molding facilities within 18 months. The Southwest and Northeast are prime regions for the new sites, Jordan said. After that, the company will consider further expansion in the Midwest.
One or both of those new facilities are expected to be the launching pad for Madras' expansion into PET containers, Jordan said. The company would like to offer a wider range of products, and customers have asked about PET for food and beverage applications, he said.
``We're in a position where more shelf-stable products are wanted by some of our customers,'' Jordan said. ``PET bottles can be more sophisticated, and everyone is looking for the newest package.''
Old World already is a Madras customer. The blow molder made bottles for Old World's Peak-brand antifreeze and for its windshield-washer solvent. The heads of both companies also share a common interest in social issues, including supporting African-American business endeavors, Jordan said.
Madras still must decide on plant locations and equipment needs, as well as how much the re-energized company will allot on capital expenditures, Jordan said. But growth is imperative to compete against the larger container producers, he added.
``As a smaller company, we don't have tremendous overhead, and we're not burdened with our cost structure,'' Jordan said. `We very much embrace an entrepreneurial model. We're already playing with the big boys, and we can position ourselves to do that from an even stronger platform.''