Spartech Corp. plans to expand its international presence, scouting China for a location to start a combination compounding, molding and extrusion facility.
The Clayton, Mo.-based company has been looking since October for an existing location in China to open the first Spartech plant in Asia, said Chairman, President and Chief Executive Officer Bradley Buechler on March 11. The company would like to start operations in China by late 2005, he said.
The facility would offer a broad range of Spartech's current product mix. It would include both sheet extrusion and molded profiles and also perform compounding, Buechler said. The company has been successful with a similar combination plant, its first, in Ramos Arizpe, Mexico, that it purchased in 2002, Buechler said.
The company is looking at sites in Suzhou, located west of Shanghai, but has not ruled out other areas, he said. Spartech would like the site to have at least 100,000 square feet, he added. Equipment needs, including the number of injection presses and extrusion equipment, will be determined after a location is found, Buechler said by telephone.
The need to go to the Far East, especially for compounding and profile work, has grown in importance, Buechler said. A change in ownership affected Spartech's plans and put them on the front burner, he said.
The company's largest investor, London-based Vita International Ltd., discouraged investment by Spartech outside the United States in the past, Buechler said. But the company, which had a 46 percent stake in Spartech two years ago, sold its remaining 18 percent share in January.
Spartech raised $60 million in a public offering when Vita sold its remaining stock. The proceeds were earmarked for global expansion, Buechler said.
``The sale [by Vita] opened it up for us to go global,'' he said. ``Before, if an expansion opportunity came along outside the Untied States, Vita had the standpoint that they had investments there already. Now we can become more international.''
The company also is considering another plant location in Europe and expects to open a second combination facility in Mexico within the next year, Buechler said.
The company recently expanded its facility in Donchery, France, adding almost 100,000 square feet.
Spartech might be most optimistic about prospects in China, with its huge population and customer shifts there, Buechler said.
``Right now, we've seen more growth in molding and compounding than in sheet [in China],'' he said. ``But we think that market for sheet will grow quickly, too.''
Spartech recorded $956.2 million in sales for the 2003 fiscal year, ended Nov. 1.