Customer pressures are prompting Glastic Corp. to launch a joint venture to do thermoset molding work in Mexico, even as it closes one of its U.S. facilities.
The pending agreement with Mexico City's Productos Plasco SA de CV will create Glastic Molding LLC, with thermoset molding production in Jefferson, Ohio, and Salem, Mich., and in Mexico City.
Within a few months, though, the new venture will close the Salem plant.
``There are a lot of [original equipment manufacturers] requiring us to be closer to them in Mexico,'' said Mark DiGiampietro, vice president and general manager.
``This actually will make us one of the biggest thermoset molders in Mexico.''
Cleveland-based Glastic Corp. will own 80 percent of Glastic Molding. Glastic Corp. also will retain its independent proprietary operations in Cleveland, and company management will oversee production at Glastic Molding.
The joint venture is expected to launch formally in early March. The Salem plant, with 45 employees making compression and transfer molded products, will operate under Glastic Molding until early summer, DiGiampietro said. The work then will be split between Jefferson and Mexico City.
Glastic, with customers in the consumer goods and electrical products industries, has seen increased pressure to offer more global production. Plasco gives it a solid base for a wider manufacturing footprint, he said.
``When you're looking to expand, you can go with a greenfield facility or look for a partner,'' DiGiampietro said. ``We found a really stable company that also had a good customer base that will allow us to grow.''
``This joint venture ... is a significant milestone for Plasco, signifying our efforts to scale up the value chain and to strengthen our presence in the global molding market,'' said Plasco President Jose Octavio Lopez Presa.
Mexico is just the first step, DiGiampietro said.
Glastic also is looking to establish its first Asian production facility by 2005.
``There are a tremendous numbers of customers in Asia who are looking for thermoset molders,'' he said. ``There are a lot of thermoplastics there, but not as many thermoset.''
Any Asian expansion probably will be close to a bulk molding compound supplier, he said.