Biaxially oriented polypropylene film major Treofan Group is entering an expansion phase after restructuring.
The firm announced June 26 that it will invest about $45 million to expand production in Zacapu, Mexico, its only North American manufacturing facility. The project includes upgrading research and development laboratories and installing a 27-foot-wide BOPP film line supplied by Bruckner Maschinenbau GmbH of Siegsdorf, Germany.
The investment will give Treofan a stronger position in North America and expand its specialty product portfolio, Treofan Chief Executive Officer Peter Briggs said in a news release issued by the Raunheim, Germany, firm.
The project will double capacity at Zacapu to about 121 million pounds per year, said Grant Gustafson, general manager of Treofan's U.S. operations. It is due for completion in the third or fourth quarter of 2007, he said in an interview from Treofan America LLC's office in Winston-Salem, N.C.
Gustafson said a detailed breakdown of the project cost won't be revealed. As well as the new multilayer, high-speed film line, Treofan will add manufacturing areas, modify materials-handling and other logistics systems, upgrade R&D equipment and add research personnel.
The extra capacity is for ``specialty and label markets identified by us,'' Gustafson said.
Last year Treofan was bought by New York-based investment firm Goldman Sachs and other financial groups. The company was formed in 2002 by the merger of three global BOPP players. Prior to the Goldman Sachs-led purchase, it was owned by Dor Chemicals Ltd. of Haifa, Israel, and Bain Capital LLC of Boston.
As part of its restructuring, Treofan at the end of 2005 sold its Australian operations to Hastings Private Equity Funds. The business reverted to its old name of Shorko Australia Pty. Ltd. Briggs said at the time that the sale was designed to help Treofan focus on important markets, including Asia. Shorko obtained rights to Treofan intellectual property in the markets of Austalia and New Zealand.
``We are very pleased that we are now refocused on growth,'' Briggs said in a news release. The new capacity will be aimed at the United States, Canada and Mexico.
Gustafson said the Zacapu plant now uses a mix of technology and equipment, including technology developed by Treofan and some equipment supplied by Bruckner. The site includes film metalizing capacity.
Treofan does not expect to compete head-on with Asian BOPP imports, Gustafson said.
``There is a role for imports, but importers tend to be at the lower end of the market,'' he said. ``The North American market demands technology and service.''
Treofan's biggest competitors in North America are ExxonMobil Corp. and Applied Extrusion Technologies Inc., according to Joe Pryweller, editor of ``Packaging Strategies'' newsletter, based in West Chester, Pa.
Treofan claims to be the biggest BOPP film producer in Europe and the second-largest globally, with 484 million pounds of capacity spread over seven sites in Europe, Mexico and South Africa.