GI Plastek LP has closed its injection molding operations to focus on its structural foam business in what executives are calling a ``retrenchment'' for the firm.
The Jan. 13 shutdown of injection molding in Marysville, Ohio, came less than three months after GI Plastek sold its reaction injection molding operations to competitor Romeo RIM Inc., and takes the Newburyport, Mass.-based business down to one processing specialty.
``Certainly 2005 was a challenging year for us,'' said President Randy Herman in a Feb. 17 telephone interview.
Plastek has been battling a series of blows. It already had a RIM business Herman called ``less than profitable'' at the start of last year.
Then during the summer, the U.S. Post Office decided it wanted to transfer production of cluster mailboxes - often used in apartment and housing complexes - to stainless steel from plastic, citing post-Sept. 11 security concerns.
GI Plastek developed the thermoplastic mailboxes with customer American Locker Security Systems Inc. 16 years ago, Herman said. The contract was more than 30 percent of the business at the Marysville injection molding facility.
``When that happened, we said: `We can recover from this. We have the assets,' '' Herman said. ``We started securing new business.''
So the company put its RIM operations up for sale to focus on injection molding and structural foam, produced in Wolfeboro, N.H.
GI Plastek inked a deal Oct. 31 with Romeo RIM, with the Romeo, Mich.-based company purchasing Plastek's DeWitt, Iowa, facility and the business in Newburyport. But just as the company began settling into its new business template, the auto-supply industry that was responsible for much of the new and remaining business in Marysville worsened.
This time, the company had no options.
``I hate to close a plant. It's difficult to see, especially when we had good people there,'' Herman said.
The Ohio site had 117 workers when it closed in January. GI Plastek is considering the best way to sell equipment there.
But despite any other issues, the company has seen solid growth in its structural foam business, with customers in the medical, military and materials-handling industries. Herman estimated sales have climbed 25-30 percent per year for the past three years.
``The business is growing. It's very healthy,'' he said. ``We've been able to secure some new business and some new customers.''
GI Plastek has retained its corporate office in Newburyport, though it is selling the building there to a third party. Once the sale of the facility closes, GI Plastek may shift its base to Wolfeboro.