Viking Plastics Inc. has entered a partnership with Poly-Cast Inc., so that both small molders now own a factory in Suzhou, China, which Poly-Cast started a year ago.
Viking, an automotive injection molder in Corry, Pa., bought 50 percent of Poly-Cast Plastics (Suzhou) Co. Ltd. Both companies, which have years of experience serving the automotive and transportation industries, will jointly own and operate the 22,000-square-foot Suzhou plant and share spending on future investments there.
Poly-Cast President Dan Leedom said executives of the two companies have known each other for a long time through industry contacts. ``It's something I probably wouldn't have done with a stranger, but because of the family history and the connection of the two companies, this will be a real nice fit,'' he said.
Poly-Cast and Viking both were founded in the same year, 1972. They are about the same size. Poly-Cast, of Tigard, Ore., generates sales of about $10 million, employs 80 and runs 24 injection molding machines. Viking Plastics, owned by Kelly Goodsel, its president and chief executive officer, has sales of about $13 million and 75 employees. Viking runs 30 injection presses in Corry.
Poly-Cast and Viking focus on small and mid-sized presses. While Viking is mostly automotive, Poly-Cast is more of a broad-based custom molder, targeting automotive, medical and pharmaceutical, electronics and consumer/industrial markets.
But, at least initially, the China operation is focusing on automotive only. Poly-Cast Plastics (Suzhou) is targeting tight-tolerance, mechanical under-hood components for automotive and general transportation sectors, such as the heavy truck market.
Leedom's son, Jeff Leedom, runs the China plant as general manager.
Production began at Poly-Cast Plastics (Suzhou) in late May of 2007 with a modest launch. The plant employs 15 and runs two Arburg presses, with a third coming soon.
But Dan Leedom said the plant is big enough to house 20 injection molding machines, with clamping forces ranging from 55-550 tons.
Although Poly-Cast and Viking do automotive work in the United States, the molders do not compete directly with each other because of their far-apart geographical locations and types of parts.
Leedom and Goodsel stressed the factory will serve customers - multinational and domestic - that need parts in China. ``We're both going to serve U.S. customers that have opened plants in China, as well as local plants in China that are there to service the Chinese market,'' Goodsel said. ``This isn't a situation of close down the U.S. plants and move it to China.''
Leedom said small independent molders can succeed in China. ``We recognize that there's a place for companies like ours in China now, as things are starting to expand in China. Not everybody has the need for very high volume and very high revenues,'' he said.
From its beginning, Viking developed a proprietary line of plastic and rubber sealing closures. The company's nylon fuel connectors are widely used in the automotive sector. Goodsel said the company has shipped products from its U.S. operation to automotive customers in Asia.
Goodsel bought Viking Plastics two years ago from a private equity company.
Poly-Cast was founded by Walter Leedom, father of Dan Leedom. Its automotive products include electronic throttle controls for heavy trucks, four-wheel-drive hub assemblies and components for automotive antennas.
Both companies rely on automation for assembly - a practice they will follow in China too. Leedom said China's new labor contract law will not hurt the business. ``We've always positioned ourselves to not rely too much on labor anyway,'' he said.