Plumbing products firm Viega North America Inc. will invest $85 million in a three-year expansion plan that includes a massive new plant in Kansas and relocation of the company's headquarters from Bedford, Mass., to Wichita.
Company officials announced the details May 22 in Wichita with local officials including Kansas Gov. Kathleen Sebelius.
The announcement comes roughly seven months after Viega acquired extruder Vanguard Piping Systems Inc. of McPherson, Kan., and Midtec Inc., its injection molding unit. Viega extrudes cross-linked polyethylene pipe and injection molds fittings at a 180,000-square-foot plant in McPherson, about 60 miles northeast of Wichita.
Viega could not expand at that plant the way it needed to, President John Fraser said. Instead, Viega is purchasing a 106-acre parcel in McPherson, where it will construct a 450,000-square-foot manufacturing complex and logistical center adjacent to Interstate 135.
The first phase of the plan will be completed by October 2007. It is the company's goal to vacate the current manufacturing facility by the end of 2007.
The company will build a 75,000-square-foot site on a 5-acre parcel for its headquarters in Wichita, relocating about 20 employees from Massachusetts.
The goal is to ship efficiently and expediently, Fraser said. Viega will invest $40 million in the manufacturing expansion.
The new plant will accommodate 30 extrusion lines and 30 injection molding machines, said Dan Schmierer, chief executive officer of Viega North America. Vanguard and Midtec currently operate 12 extrusion lines and 12 molding machines.
``We'll do some refurbishing; about two-thirds of the equipment eventually will be new, both on extrusion and the molding side,'' Schmierer said.
Viega North America is owned by Viega GmbH & Co. KG of Attendorn, Germany, which began in 1899, focused on brass beer taps. It grew into home plumbing products in 1901.
Viega entered the North American market in 1999.
``Our products are stored in 3,000 different plumbing wholesaler locations in the United States,'' Schmierer said.
``Worldwide, Viega sales are confidential, but I will tell you that here in the United States, we are on course this year to achieve a sales level of $230 million.''
By 2010, the firm expects to more than double its sales in North America.
``We expect to be more than $500 million a year in plumbing and heating business sales,'' he said. ``That's growth of over 20 percent a year. But we think we can do it because we're going to commit a lot of resources.
``The first thing you'll see in the next four years is that we're going to add a lot of people. By 2010, we expect to create 325 new jobs here in America, 275 of which will be in Kansas. By 2010, we'll have about 500 people working for Viega in McPherson. That's 175 more, concentrating mostly on manufacturing and research and development. We'll have another 100 people in Wichita.''
Recent legislation in Kansas will help the company with its equipment purchases. Sebelius the same day signed legislation eliminating property taxes on new business machinery and equipment purchased after July 1.
``What I know is that tax relief will create opportunities for business to grow and create new jobs in Kansas, and it will make our state even more conducive to job creation,'' Sebelius said.
Schmierer said in an interview that the company's North American expansion also includes a planned West Coast logistical center and warehouse along with a training and seminar center. The company will be building a training and seminar center for the Midwest and plans to open another in Nashua, N.H., later this year, he said.
``In this kind of business we're in, you have to do a lot of training,'' he said. ``We will have at least three or four training and seminar locations.''
According to Schmierer, PEX has about a 30 percent market share in plumbing-related activities, while copper has about a 60 percent market share and chlorinated PVC claims about 10 percent.
``In the next four to five years, we think PEX will increase in share from 30 percent to about 50 percent of the market, driven by the fact that copper prices are so high,'' he said.