JER Envirotech International Corp. plans to set up a U.S. production operation in the Greenville, S.C., area by the end of the year.
JER's U.S. sales of biocomposites are growing and the firm needs to make them in the United States to cut down on freight charges, said JER Chief Executive Officer Edward Trueman in a telephone interview.
``It's a good strategic and logistical location,'' Trueman said in referring to the Greenville area. JER is based on the Canadian West Coast in the city of Delta, British Columbia.
JER already has firm purchasing commitments from one customer in the area, Guardian Building Products Distribution Inc. of Greer, S.C. In November Guardian signed a four-year agreement to buy biocomposite pellets and boards based on polypropylene and wood-fiber composites. Trueman said other U.S. customers also will be served by the new plant near Greenville.
Guardian Building Products makes composite decking in Greer. It is a subsidiary of Guardian Industries Corp., a major glass and auto parts manufacturer based in Auburn Hills, Mich.
JER will start with two extruders in its new U.S. plant but there is potential double or triple capacity as demand builds for the composites. Equipment for the plant will come from Malaysia, where JER is shutting down a joint venture.
JER's process is flexible and can use fiber sources as diverse as wood and rice hulls. It uses a proprietary coupling agent to strengthen the bond between wood fibers and plastic resin, and to help make it more water and warp resistant. Trueman said virgin and recycled resins can be used in its extrusion process.
Trueman indicated a location decision will be made for the new plant in a month to a month and a half. The plant will be JER's third. In addition to the three-extruder Delta operation, JER runs a joint venture near Manila, Philippines, that uses rice hulls as the fiber source.
JER became a public company in 2004. For the second quarter of its fiscal 2008 ended Feb. 29, it logged sales of C$424,000 (US$431,000), up from C$53,000 (US$54,000) a year earlier. Net loss for the quarter was C$1.75 million (US$1.78 million) versus a net loss of C$796,000 (US$809,000) a year ago.