DOYLESTOWN, PA. (Nov. 15, 10:05 a.m. ET) — Color concentrates maker Penn Color Inc. is wrapping up a year in which it completed two plant expansions — and the Doylestown-based company now is looking to grow through acquisition and/or international expansion.
“We have two new plants and lots of room to grow,” Bob Kaminski, thermoplastics industry manager, said in a recent interview. “We're looking to take market share through internal growth, but we're also looking for acquisition candidates.”
The expansions took shape in the forms of a new 52,000-square-foot plant in Milton, Wis., and a 15,000-square-foot addition to a plant in Venray, Netherlands. The $9 million Milton plant employs 15-20 and operates six extrusion lines. The site can be expanded to at least 150,000 square feet and was in full production in July, according to Kaminski.
In Venray, Penn Color added 15,000 square feet to a 50,000-square-foot site. The 8 million pounds of additional capacity originally will be focused on rigid PET packaging, but eventually will also be aimed at all other thermoplastic resins and end markets. That expansion was completed in February.
Penn Color has made six acquisitions during the past 25 years and is looking for more, Kaminski said. Its most recent came last year when it bought the customer lists and formulations of color concentrates maker Lancer Dispersions Inc. of Akron, Ohio.
On the international front, Penn Color already has a joint venture plant in India and hopes to have production in China “in the next couple of years,” according to Kaminski, who added that the firm probably would have some of its products made there on a toll basis before producing on its own. Penn Color already operates a sales and trading office in China. The firm also is looking at South America and Eastern Europe for future growth, Kaminski said.
Penn Color has come a long way since 1964, when it was founded as PFD Plastics by Edgar Putman in Flemington, N.J. Putman was working as general manager of a stone quarry at the time, but like many other entrepreneurs, saw a great opportunity in plastics, according to Dave McGarrity, vice president of sales and marketing.
The firm originally focused on single-pigment PVC dispersions. It survived and rebuilt after a 1968 fire destroyed its original location. In 1971, PFD bought the Doylestown-based Penn Color division of Sun Chemical, renaming the firm and relocating it there.
The firm did all of its plastics business in PVC until 1990, when it decided to branch out.
“For the first 25 years, we were a high-quality supplier to PVC and coatings markets,” McGarrity said. “But we saw PVC maturing and started to plan to expand our product lines. We looked to expand globally and become an international supplier.”
Penn Color now generates about 15 percent of its sales from international business. Putman's son Kevin joined the business in 1978 and has served as Penn Color's president and CEO since 1990.
The Putman family has retained sole ownership of the firm, which employs more than 600 and has annual sales of more than $200 million. Since 1980, Penn Color has averaged compounded annual growth of more than 10 percent.
Color and pigment dispersions account for a majority of Penn Color's sales. The firm uses most commodity resins, with polyethylene having the largest share of volume. Penn Color sells into most major flexible and rigid end markets.
In the U.S., Penn Color now operates six plants, including two at what McGarrity calls “the mother ship” in Hatfield, Pa.
The company operates 400,000 square feet of manufacturing space and more than 40 extrusion lines there, with capacity of about 50 million pounds per year. The site also includes a 40,000-square-foot research center.
In addition to the new plant in Milton, Penn Color's other U.S. plants are in Elmwood Park, N.J.; Richmond, Va.; and Ringgold, Ga. The 100,000-square-foot Ringgold plant was built in 2008 and now operates 15 million pounds of capacity, much of which currently ends up in the synthetic fiber market.
Most of Penn Color's production lines are twin-screw lines. The firm also designs and builds some of its own auxiliary equipment. Twenty-five percent of Penn Color's employees work in research and development or quality assurance.
Penn Color can achieve loadings of up to 70-75 percent on some materials. Optimax-brand PVC concentrates are one of the firm's more recent success stories. The materials — launched in 2009 — can be used with very high loadings and can achieve wood-grain effects in siding and decking.
Pennacle-brand PET concentrates also have performed well for Penn Color in recent years. The materials eliminate most processing problems associated with coloring PET and are suitable for both single-stage and two-stage blow molding processes. New color development is done on Penn Color's two-cavity single-stage blow molding machine.