U.S. Farathane Corp., a Sterling Heights, Mich., injection molder, has achieved its goal of entering the profile extrusion business by buying a former supplier.
USF bought the assets of Hahn Elastomer Corp.'s Plymouth, Mich., operation. Terms were not disclosed. Hahn, which also had plants in Jackson and Warren, Mich., had closed its doors in August.
USF has signed a one-year lease for Hahn's Plymouth facility, but intends to move the extrusion operation to USF's own new site within the next eight to 12 months, President Andrew Greenlee said by telephone.
The newly formed USF Plymouth Division now has about $10 million in annual sales, including hood seals and bulb seals. Greenlee said USF expects to double that output within the next two years. Privately held USF, as a whole, has annual sales of about $70 million.
He said USF had considered expanding into extrusion as part of its drive to produce highly technical parts. It wanted to add coextrusion and tri-extrusion to its product offerings. The purchase allows it to follow through on its plan to add those capabilities, and secure the continued delivery of parts, Greenlee said. With the Hahn assets, USF can offer customers injection molded parts, extruded profiles, or components that combine molded parts and extruded seals.
Thermoplastic extrusions of the sort Hahn produced have gained attention in the auto industry as a replacement for standard rubber seals, but business is highly competitive and may prove difficult to crack, noted Joel Kopinsky, principal of ITB Group Ltd., a Novi, Mich.-based consulting business.
Small sealing firms must compete with major players like Cooper-Standard Automotive Group, GDX Automotive Inc. and Toyoda Gosei Co. Ltd., which have established contacts and product lines. GDX and Cooper-Standard also have new investment-group backers with deep pockets able to provide fiscal backing.
``It all depends on the areas they're getting into [for sealing],'' Kopinsky said. ``Maybe in auxiliary parts it may be easier, but you're going up against some big players. The whole business is extremely competitive.''