Sigma Plastics Group plans to launch a major stretch-film plant in Southern California by the end of September, further cementing its presence in that region.
The company, based in Lyndhurst, N.J., and its Sigma Stretch Film Corp. unit will open a 76,000-square-foot plant in Riverside devoted solely to stretch film, Sigma Chairman and Chief Executive Officer Alfred Teo said July 8.
During the next 15 months, Sigma plans to move five cast and blown film lines to the plant and hire about 80 people, Teo said. Once all the equipment is running, the facility will have an annual capacity of 70 million to 75 million pounds of polyethylene film, he said.
That volume is the largest for any U.S.-based stretch-film plant west of Oklahoma, Teo said. The company operates one larger stretch-film plant in Shelbyville, Ky., that produces about 90 million pounds annually, he said.
The investment in Riverside is one of a series of recent steps to strengthen Sigma's West Coast operations. Until last year, Sigma only had a single California plant, in Rancho Cucamonga, Calif.
In February 2003, the company purchased a bag-making plant in Rancho Dominguez, Calif., as part of its acquisition of financially distressed Apple Plastics International LLC. Then, in November, Sigma and plastic-bag competitor Vanguard Plastics Inc. decided to jointly operate a plant in Compton, Calif., that the two companies purchased from Orange Plastics LLC.
That facility is run under the name VS Plastics LLC and makes merchandise and T-shirt bags.
The Riverside plant will take equipment from both Rancho Cucamonga and Compton, including one cast and one blown film line from each facility, Teo said. Sigma also will buy a new blown film line from Battenfeld Gloucester Engineering Co. Inc. that will be installed in January, he said.
``We should have the first two lines running by the end of September,'' Teo said. ``We don't want to interrupt anything at the other plants, so we'll probably add a piece of equipment [in Riverside] every three months. We want to consistently have production going on in the other facilities.''
The equipment moves will free up room for bag-making operations in Compton and for nonstretch-film products in Rancho Cucamonga, he said. The Rancho Cucamonga plant produces about 40 million to 45 million pounds a year of nonstretch-film and needs room to grow, Teo said. That facility makes garment and produce bags and industrial film.
The Riverside facility was formerly a warehouse for roll paper and includes rail siding and a rail-car delivery area, he said. Sigma bought the building for an undisclosed amount.
The new blown film line will be the 20th for the company, which claims to be the largest maker of stretch film in North America. The five plants operated by Sigma Stretch Film will produce more than 300 million pounds a year once the Riverside plant installs all its equipment, Teo said.
Sigma, a privately held company, expects sales to reach more than $950 million this year, compared to $865 million in 2003, Teo said. The stretch-film industry is extremely competitive but continues to grow, he said.
``Having the capacity and the strategic locations helps quite a bit,'' he said. ``We're constantly looking for an opportunity to expand.''