Custom injection molder Victor Plastics Inc. will shut down its plant in Kanola, Iowa, by July, when its contract with Whirlpool Corp. expires.
The Kalona factory makes refrigerator parts for a Whirlpool plant in Amana. But Victor's 135,000-square-foot facility, which it moved into 20 years ago, now is marked for sale. Chief Financial Officer Charles Brown said some interested parties already made inquiries in the past few days.
Some of the 209 employees at Kalona, 15-20 of whom are salaried workers, will be offered positions at Victor's other locations.
Brown said the company is evaluating the 37 presses at the site, which have clamping forces of 30-1,450 tons. Some will be transferred to Victor's three other plants.
The company's 120,000-square-foot headquarters facility in North Liberty, Iowa, houses 44 presses of 30-1,450 tons.
When Whirlpool acquired Maytag Corp. last summer, Victor renewed its original contract with Maytag for a year. But the company decided to end the business with Whirlpool, and ``the decision was communicated to Whirlpool in February.''
The appliance business represents a major portion of Victor's near $100 million in sales. The company made its first-ever acquisition in October, buying Kincses Tool & Molding Corp. in Flora, Miss. At the time, Victor estimated substantial growth for the new facility and planned to expand this year.
However, ``a portion of the growth we were anticipating was with Whirlpool,'' Brown said. The Flora plant served Whirlpool's facility in Oxford, Miss. As Victor bids farewell to Whirlpool, the Mississippi expansion plans have been canceled.
Since the acquisition, Victor has added and upgraded machinery to the 40,000-square-foot Flora plant, which now has 24 presses of 55-500 tons and 75 workers.
The company is transferring some work from Iowa to Mississippi in order to be closer to local customers. Brown said the company also is developing new customers in that region, ``we are pretty much right on target.''
As the company is terminating the working arrangement with Whirlpool and restructuring internally, Brown said 2007 sales will probably reflect the impact. The company sales reached a peak of $102.5 million in 2004 and have been stabilized in that range.
End-market concentration will also shift from appliances to other industries such as recreational vehicles and consumer products.
Brown did not give details about the ending of the Whirlpool contract, but he said it was to the company's best interest in the long term.
``What we do is right-sizing the company to a smaller sales base,'' he said. ``Is bigger always better? Only if your sole objective is the top line of the income statement.''
In Victor's case, ``the company will be stronger going forward as a smaller company than as a larger company.''
Victor is the latest in a line of custom molders that have lost or walked away from Whirlpool work in recent months.
In November, Moll Industries Inc.'s walked away from a 50-year history of molding for Whirlpool, dropping $60 million in business. Moll said it could not meet Whirlpool's pricing demands.
In January, Clarion Technologies Inc. announced it would close a plant in Ames, Iowa, that formerly served Maytag.
Victor was acquired by Spell Capital Partners LLC of Minneapolis in 2004. The company has run a logistics center in Shenzhen, China, since 2002, and subcontracts some work to local molders on a limited basis, according to Brown.
