ACS Group plans to open a plant in China this year to manufacture auxiliary equipment.
``We're looking at our own plant,'' said Kevin Chudyk, vice president of sales at the Wood Dale-based machinery maker.
ACS already sources its low-priced EconoGrind brand of granulators from China. ACS officials said the granulators are made by a multinational company that runs a plant in China, although they declined to name the supplier.
Chudyk said ACS has worked with the China operation for three years. That business relationship will continue for granulators.
ACS wants to open its own China factory this year to make a range of auxiliary equipment-everything except the granulators, Chudyk said.
ACS officials discussed their plans for China, and a strategy to diversify the firm's equipment beyond plastics, during an interview earlier this year in Wood Dale.
Chudyk said that operating its own China factory will help ACS expand into the Asian market. ACS already has a regional sales and service facility in Singapore.
Some manufacturers consider China a threat. But Chudyk said making some things in China will help strengthen U.S. manufacturing, including ACS, which employs about 600.
``We're putting in an ACS facility to manufacture equipment and supply the Chinese and Asia market,'' he said. ``Additional to that is, we're looking at where can we bring costs down, to make sure that our local, domestic [plastics] manufacturers are successfully competing. Because we cannot increase prices. We have to get prices down for our customers, the best we can.''
Chudyk said ACS is not afraid of Chinese competitors copying its equipment - currently a hot topic in the globalization debate. They already can take apart a U.S.-made machine. The key is to focus on the total package, he said: ``You make sure the equipment is delivered properly, it works properly. You service before and after the sale. And that's where the value comes in. You can't copy that.''
ACS began formulating the China moves - as part of a broader series of strategic changes - in 2000. Officials were worried about plastics machinery markets even before NPE 2000, Chudyk said. Most machinery executives say the U.S. market crashed shortly after the record-setting Chicago trade show.
``We knew it was going to take a hit,'' Chudyk said. He, ACS President Tom Breslin and Steve Petrakis, a vice president at ACS' Sterling Inc. unit, toured the show. ``We looked at each other and went, `It's here.'... The market was going to die,'' he said.
The ACS leaders listed several changes: become more international, move into some nonplastics markets and supply more automated systems. During the downturn, the company went against the grain by boosting spending on product development, and hiring of engineers and other key employees.
ACS has served certain nonplastics markets for some time, but the diversification pace is picking up, said Petrakis, Sterling vice president of sales and marketing in Milwaukee. He points to a new machine - a fountain solution circulator for the printing industry.
``We're diversifying,'' he said. ``We want to make sure that this company is strong through whatever the economy hits us with.''
This year, ACS will exhibit at 20 trade shows outside of the plastics industry. The company is pitching its granulators to the wood recycling industry, and to areas like landfills, which must size-reduce trash to save space. Another new market: grinding up computer products so a competitor cannot steal the chip.
This has led to some unusual trade-show encounters. Petrakis laughed as he recalled one waste management show.
``We had a guy come to the show and ask us if we could grind up chickens. When the chickens are done and can't lay eggs, and they can't use them for food, they want to know if they can just shred them up!''