Rising demand for thermoplastic elastomer compounds has led a pair of firms to add capacity in that product area.
Vi-Chem Corp. of Grand Rapids, Mich., and HiTech Polymers Inc. of Hebron, Ky., each have added new twin-screw extrusion lines this year. The moves have increased Vi-Chem's annual capacity by 9 million pounds and Hitech's by 10 million pounds.
Vi-Chem invested $750,000 in its line and plans to add five employees to handle growth, officials said. Officials credit the firm's line of TPE and thermoplastic olefin products - launched in 1999 - with allowing the company to enjoy growth of 15-25 percent. Vi-Chem may add another TPE compounding line by the end of 2006 if the economy stays strong, Vi-Chem sales and marketing manager William Greer said in a recent phone interview.
The TPE line has allowed Vi-Chem to grow in the automotive market, which accounts for about 90 percent of the firm's sales. Automotive customers are using Vi-Chem TPE compounds in large components such as instrument panels, floor mats and armrests.
Vi-Chem has been able to grow in a slowing North American automotive market by promoting its styrenic block copolymer TPE compounds, Greer said. The firm's experience in color work also has been a plus, he added.
TPE products currently account for about 40 percent of Vi-Chem's sales, with the rest coming from PVC compounds. The 85-employee firm - purchased last year by longtime manager Leonard Slott - doesn't release annual sales figures.
At HiTech, the new line will help the firm compound thermoplastic vulcanizates, thermoplastic polyurethanes and other TPEs, officials said.
HiTech makes clear, opaque, conductive, antistatic and color grades of those products, as well as compounds of several engineering resins.
President and part-owner Gerald Miller said HiTech has seen solid growth in injection molded parts, consumer products, housewares, extruded sheet and packaging.
HiTech now operates eight lines at a 60,000-square-foot plant and has 40 million pounds of annual capacity. The firm employs 20 and plans to add five or six new jobs, Miller said.
Moving forward, HiTech already has plans in place to add another twin-screw line by the end of the year. That line will add 10 million pounds of capacity for TPE- and TPO-based compounds and create five new jobs.
In 2004, HiTech posted sales growth of about 5 percent, but Miller said the firm ``should do much better'' in 2005. Privately held HiTech does not release sales figures.
TPE compounds have grown quickly since HiTech launched its line five years ago, although more than half of the firm's sales still come from compounds based on polycarbonate, ABS, polyester and other engineering resins, Miller said.