Automotive supplier and two-shot molding specialist U.S. Farathane Corp. has purchased a 166,000-square-foot building in Jackson, Tenn., marking Farathane's first move beyond its Michigan base.
Farathane expects to begin injection molding in Tennessee in March, said Andrew Greenlee, president and chief executive officer of the Sterling Heights, Mich.-based company. The building, originally built for manufacturing, was being used as a distribution center, he said.
Farathane officials expect the Tennessee plant to generate about $30 million in sales within 18 months. It will employ 80 when it opens, and 130 by 2007.
The new plant signals a new Southern exposure for Farathane, which employs 575 people at four injection molding plants and two extrusion factories, all in Michigan. The company makes a range of automotive parts, including window-latch assemblies, headrest guides and brake reservoirs, and molds two-shot parts such as heat and taillight panels and interior trim parts.
The new location also signals Farathane's move into much larger presses, including some 1,500-ton machines with rotating platens for multishot molding, as well as two 2,000-tonners for traditional molding, Greenlee said. One 1,500- ton two-shot press already is ``running production flawlessly'' at the company's plant in Utica, Mich., he added.
Up until now, Farathane's largest press has had 720 tons of clamping force. Greenlee said the big new machines will allow the company to mold larger two-shot parts, but he declined to give details on the components or customers. The large-tonnage machines are used Husky and Ube injection presses that are only a few years old, he said.
Greenlee said Farathane will run 20 presses in Jackson by the end of 2006 - seven of them 1,500 tons and larger. Some of the machines will be moved from other locations.
Greenlee declined to give the amount of the investment in the building and equipment. He said Jackson won out over cities in Mississippi, Alabama and Georgia. Jackson and the state of Tennessee offered a package of local and state tax abatements. Farathane also received ``significant training grants, which were very important to us,'' he said.
Located between Nashville and Memphis, the factory in Jackson will put Farathane production closer to more plants of its Big Three customers and help it win more business from the ``new domestics,'' or U.S. plants run by Asian- and European-based carmakers.
Greenlee said that, initially, Big Three sales should generate two-thirds of business for the Tennessee plant. The other one-third will come as a Tier 2 supplier to the new domestics, he said.
``This definitely gets us closer to our customer base,'' Greenlee said. ``Logistically it's much more favorable than shipping out of Michigan.''
Farathane will generate 2005 sales of about $80 million, according to Greenlee. For 2006, the company is projecting sales of around $100 million, he said.