A. Schulman Inc., one of North America's largest compounders, is moving into commercial sheet production.
``We're moving downstream toward the [original equipment manufacturers],'' Schulman President and Chief Executive Officer Terry Haines said Sept. 9. ``We'll be making the sheet product itself, using our own materials.''
Fairlawn, Ohio-based Schulman recently expanded a building at its research complex in Sharon Center, Ohio, to house its first sheet line. Haines said the line was for developmental projects, but also will be used for commercial production. A second commercial line will be installed at the site by mid-2006.
Schulman plans to add a new building devoted to sheet production in Sharon Center that would house five additional lines. Sizes of sheet available will include 18-inch, 40-inch and 60-inch products. Total cost of the expansion and new building will be around $41 million, Haines said.
Sheet produced in the new venture will use Schulman's Invision-brand technology, which officials said offers a superior alternative to paints, paint films and other technologies in producing colored plastic sheet. Initially, Schulman sheet will consist of ionized polyethylene covered with a layer of Schulman's Surlyn-brand ionomer. Other sheet products will incorporate polypropylene and thermoplastic olefins, Haines explained.
Initial production will be aimed at rocker panels and bumpers for the auto market. The new sheet products also can be used in a wide array of products including parts for lawn mowers, snowmobiles and refrigerators, Haines said.
A recent Plastics News industry estimate ranked Schulman as North America's fifth-largest compounder with an overall market share of 3-4 percent, based on North American sales.
Schulman came under fire earlier this year when Barington Cos. Equity Partners LP, a New York investment firm that had acquired a 6 percent stake in the firm, called for Schulman to be sold. Barington officials argued that Schulman's value is not properly reflected in the public marketplace.
Through the first nine months of Schulman's 2005 fiscal year, profit was down 8 percent to $25.6 million, even though sales were up 18 percent to almost $1.1 billion. Schulman generates about 70 percent of its sales from Europe, where nine-month sales were up 24 percent.
Schulman derives about 70 percent of its sales from compounding and color concentrate production of products primarily based on PE, PP and PVC. The remainder of the firm's sales come from resin distribution.
On Wall Street, Schulman's per-share stock price began the year around $21, but was just above $18 in early trading Sept. 9.