ELMHURST, ILL. (Dec. 16, 1 p.m. ET) — Bema Inc. expects to invest about $4 million for extrusion equipment, infrastructure and improvements at its St. Charles, Ill., facility.
“We expect to be extruding film in the fall of 2012,” Glen Galloway, owner and president of the Elmhurst, Ill.-based flexographic printing, laminating and converting company, said in a telephone interview.
“We would expect to be placing an order on new equipment by March or April. It is my understanding that the lead time is six months, so that puts us in the fourth quarter for extruding film.”
Meanwhile, a transformation is taking place at the St. Charles factory.
“The build-out is now in the design phase and will continue through the winter and spring,” he said. “There is a lot to do,” including roofing, parking and landscaping.
Bema in Elmhurst discontinued in-house extrusion of low density polyethylene film in 2006 and sold or scrapped the equipment.
“Anything in the future will be new equipment,” Galloway said.
The refurbished St. Charles facility should employ 20 initially. The plant could have as many as 50 workers by the end of 2014, said Christopher Aiston, the city's director of economic development.
Galloway projects additional capital investments in future years for other equipment in St. Charles. Galloway acquired the 71,000-square-foot building on 4.35 acres in September for $1.95 million, according to the St. Charles Township assessor's office.
The building was constructed in 1985, expanded in 1995 and, until 2009, housed a door and window millwork business.
Galloway praised St. Charles for being “easy to deal with,” and said he likes the city's municipal utility rates. For steady volume demand, those rates may be 20-30 percent lower than those from Exelon Corp.'s public-utility subsidiary Commonwealth Edison, according to Aiston.
Bema is exploring potential tax incentives for the project.
In early 2010, Bema management recognized space limitations. The 40,000-square-foot Elmhurst facility “had no room to expand as it was missing one key component to extruding film: rail access,” Galloway said. “We started taking in container loads of film such as PET and [biaxially oriented polypropylene] and had a very difficult time organizing the raw material inventory.”
Bema currently employs 51 in Elmhurst.
The company got serious around June 2010 in searching for a facility to accommodate warehousing, in hopes of building out the facility for extrusion at a later date.
Bema found its choices limited to a building with rail access already established as well as a city that would not restrict a tower height of 55-60 feet.
“At the time we were only looking for a 30,000- to 40,000-square-foot facility, and the challenge became even bigger as most facilities having rail were much larger than what we were looking for,” Galloway said.
Galloway is planning ahead. “We are looking at geothermal [energy] and other measures to cool the Elmhurst facility, as well as the St. Charles facility. Also, adding lamination capacity is still on the capital project list.”
Bema has some West Coast customers. “If [the company] continues to expand as projected, it will be a necessity to open a facility in the West,” he said. “We support the West Coast very well from Elmhurst. However, as the business expands, freight becomes a bigger issue.”
Bema's 2010 sales approached $20 million and are on track for 8-10 percent growth during 2011.
Galloway “does more with less than anyone else in the industry,” said Andrew Wheeler, vice president with equipment supplier Windmoeller & Hoelscher Corp. in Lincoln, R.I.
“He has built a spectacular niche business” often involving short-run jobs “other companies refuse to do.”
The Elmhurst site operates two 52-inch-wide W&H flexographic printing presses: an eight-color Miraflex that went into service in March and a 10-color Primaflex CM that started production in early 2008.
Sam Shaw founded Bema in 1957 and sold the business to Galloway in August 1999.
The Elmhurst and St. Charles locations are about 19 miles apart.