PVC conduit maker Heritage Plastics Inc. will have its fifth extrusion plant in the U.S. operating by early 2007 in Milford, Utah.
Heritage has named managing partner Dennis Stuhlman as president of Heritage Plastics West, to head up that operation. Stuhlman formerly was with PVC pipe company Cantex Inc. in Mineral Wells, Texas.
Heritage will build a 50,000-square-foot plant, officials said during an Aug. 8 interview at the firm's Weatherford headquarters plant. Groundbreaking will take place this month on the 13-acre site.
The plant will be equipped with six extrusion lines, with room to grow to eight, and two fabrication machines for electrical sweeps. The company already has purchased 80 percent of the equipment. Jeff Funck was named plant manager.
``We wanted to be close to the Vegas market, Southern California, northern California,'' said Bill Raffaele, president of Heritage Plastics Central. ``Our next objective is to look into the Northwest.''
The firm also is expanding in Weatherford, where it is adding a 10th extrusion line. Officials also started a fabrication department to make elbows. At its plant in Carrollton, Ohio, Heritage will add two extrusion lines; it currently has four.
Officials said it is critical to stay lean in the PVC pipe and conduit business. The fickle market rides the wave of the construction market in residential and commercial activity. In the market, rising resin prices mean players are likely to have higher margins and sales volumes.
Generally speaking, it's a highly fragmented business known for its commodity nature.
Stuhlman said: ``It is a good business, but it has gone through difficult times. When you have difficult years, you learn how to be lean.''
``We want to grow the company to be a bigger player in the industry and we will,'' Raffaele said, reinforcing that the PVC pipe business requires strictly disciplined management practices to survive.
``We don't have a debt load, and you have to operate with low overhead. We now have more management strength and more support for each other,'' he said of the management structure that includes four regional presidents.
``We can keep a sharp eye on the market,'' he said. ``The market changes from state to state.''
Other players in the PVC conduit market are undergoing machinery upgrades or additions. Beachwood, Ohio-based Lamson & Sessions Co. announced in its annual report that it would install equipment in the first half of 2006 and address quality issues.
That publicly held company will invest $12 million to $15 million in 2006 to upgrade extrusion and injection molding at plants across the country, officials said in the report.
The overall market is being affected by growth in nonresidential construction activity, which is expected to grow at a clip of 11.2 percent in 2006, according to Reed's Construction Data. Activity in residential construction is cooling, but still will remain at historically high levels coming off boom years from 2000-05.
