Fortis Plastics LLC has added an injection molding shop in Mexico to its holdings, as part of a plan to create a new business model for plastics.
With its purchase of Dallas-based Moll Industries Inc.'s Ramos Arizpe plant, Fortis is pursuing its acquisitions strategy to be a regional custom molding specialist that can work with a variety of customers in their own backyards.
A lot of people in the past have acquired [molders] and then put all their offices all their engineering, all their technology in one location, said President and Chief Executive Officer Joseph Mallak, in a Feb. 9 phone interview. What we're trying to do is look at this as a regional molding play. We plan to keep things in the region, so they're close to their customers, close to their needs, and our engineers will know their plants and know their tools.
Fortis was created in 2008, when private financial group Monomoy Capital Partners LP of New York purchased the injection molding unit of Atlantis Plastics Inc., and then added L&P Plastics LLC to its portfolio.
Fortis, based in South Bend, Ind., has 10 U.S. plants with injection molding and extrusion capabilities. Those operations stretch from Elkhart, Ind., and Jackson, Tenn., down to Booneville, Miss., and Brownsville, Texas and now Mexico, Mallak said.
The company closed some plants to consolidate operations in Brownsville and Elkhart, but it still remains on the lookout for potential sites.
Fortis and Moll did not disclose the purchase price for the 136,000-square-foot injection molding plant in Ramos Arizpe. The operation supplies parts to Mexico City-based appliance maker Mabe México, and is close to other major manufacturers including Whirlpool Corp., Deere & Co., Carrier Corp. and Black & Decker Corp.
Fortis wanted to go to Mexico to work with companies already in the country, Mallak said. It does not want to supplement U.S. jobs with work in Mexico, but rather build up a chain of regional molders.
Regional capabilities are essential to customers that need expertise from their suppliers, but don't want to spend hours on a plane to meet with engineers or mold designers at a single technical center, he said.
Fortis plans to beef up its regional purchases by instituting a companywide lean manufacturing focus, led by George Pucci, vice president of operational excellence; and by leveraging its knowledge of materials and tooling. Those improvements will be key for Fortis and its customers.
We don't want to do this just for us, Mallak said. If we can do more cavitations in a tool and shorter cycles with automation and less labor involved, that helps us and helps them.
Fortis already holds contacts in a variety of industries through Atlantis, which molded parts for home appliances; and through L&P, which did injection and structural foam molding for power tools and for the medical and auto industries.
Backed by Monomoy, Fortis is in a good position as a buyer, not only because it has ready access to funds but also because its strategy gives it greater flexibility in targeting and finding the right acquisitions.
There are deals being discussed throughout the industry, but there is more demand for acquisitions within the medical and packaging fields, said one merger and acquisitions consultant. That gives Fortis a wider range of companies to pick from and fewer competitors for the firms it wants to buy, the consultant said.
[Monomoy] was very smart about being conservative three or four years ago, Mallak said. They kept a lot of cash back. That's given us a luxury as good deals come about.
The company will consider both individual plants, and firms with as many as 10 different plants, if they have the right locations and a good customer mix, he said.
It's exciting that we've got a lot of potential for growth in front of us, he said.