Plastipak Packaging Inc. is making a serious statement in central Europe by putting three facilities in the region. The move makes Plastipak one of the few U.S.-based blow molders with operations in that developing area.
The bottle maker, headquartered in Plymouth, Mich., until now did not have even a single plant on the European continent and had only two facilities outside North America. That will change in late 2004, when Plastipak opens plants in Slovakia and the Czech Republic, said Frank Pollock, vice president of international marketing and business development.
``We just saw this as a good opportunity,'' said Pollock, speaking March 2 from Slovakia. ``Western Europe is fairly mature in terms of preform bottle suppliers, and we decided to open a new market instead. New nations were admitted to the [European Union] in May of this year, and we have the opportunity to cross-ship to other countries.''
The company already has opened a technical and design center in Bratislava, Slovakia, the country's largest city. The center focuses on both bottle design and design work for the company's machinery division, Pollock said.
Next up is a PET blow molding and preform injection molding plant in Prague, and a PET recycling facility in Kechnec, Slovakia, Pollock said.
The new plants each will be about 80,000 square feet, he said. Construction will begin after the company reviews contracts and goes through the permitting process. Executives still are deciding what equipment to add to those sites, Pollock said.
Plastipak is making its largest regional investment, about $13 million, in the Kechnec plant, located in eastern Slovakia not far from the borders of Poland, Hungary and the Ukraine. The company will start with a post-consumer recycling operation capable of processing 308 million pounds of PET annually from different resin grades, Pollock said. The site could process high density polyethylene in a second phase, he said.
Several large soft drink bottlers have operations in the region. Both Coca-Cola Co. and Pepsi-Cola Co. have mandated the use of 10 percent recycled content in PET bottles starting in 2005, a reason to add a recycling plant in Europe, Pollock said. While much of the recycled PET will be used for bottles, some will be returned to material suppliers, he said.
The facility will be operated by Plastipak's Clean Tech Inc. recycling group and go under the name Clean Tech s.r.o. Clean Tech Inc., a major North American PET recycler, has a facility in Dundee, Mich.
The Prague plant represents an initial investment of several million dollars, Pollock said. The facility will go under the name Plastipak Prague s.r.o. and will open with one blow molding line and an injection molding operation, he said. The Kechnec facility also will injection mold preforms, he added.
The company expects to employ about 100 between the two plants, Pollock said. Most of the workers will be local, although several Plastipak employees will assist with training and launching operations, he said.
Plastipak operates 13 plants in the United States and two in Brazil.
The ventures in Brazil have grown in sales from $8 million in 1996 to $86.5 million in fiscal 2003, ended Nov. 1.
The company said in an annual report that it expects a healthy conversion to plastic packaging from other materials in developing countries, as economies expand and industrialization continues.
The company, a maker of PET and HDPE bottles, also is expanding in the United States, opening a $45 million plant in Pineville, La., later this year and starting blow molding facilities in Plant City, Fla., and Birmingham, Ala., in the past two years.
The company ended fiscal 2003 with sales of $897.8 million. The company ranked fourth on Plastics News' survey of North American blow molders in 2003, estimating its related sales at $790 million.
