PUEBLA, MEXICO (March 7, 3:20 p.m. ET) — Tiers 2 and 3 auto supplier Schlemmer USA Inc., a division of Bavarian multinational Schlemmer GmbH, has unveiled major expansion plans that, among other projects, could see it entering the plenum cabling sector.
“We've done some material trials on that,” Rajiv Iyengar, Schlemmer's vice president for the NAFTA region, told Plastics News, alluding to a product that's becoming increasingly popular in the construction industry thanks to a higher-than-normal resistance to flames.
Iyengar, 48, who joined Schlemmer USA in 2009, overseeing its manufacturing, sales and distribution operations in San Antonio, Texas, and Papalotla, Mexico, is bent on developing the business to the maximum and sees diversification as a way of contributing to growth.
In an interview he insisted Schlemmer USA has no intention of abandoning its core business — corrugated tubing for the automotive industry. But he said the company is already supplying a comparable product to the energy industry and “trying to push ourselves into ecotech [renewable energy] solar products,” among other projects.
Schlemmer USA has about 350 customers, including all the major Tier 1 auto industry suppliers. It has conducted manufacturing in Mexico for 15 years but in the US operated just as a distribution center for products imported from Germany and Mexico until 2009.
That year the Mexican and U.S. businesses were placed under one management and manufacturing began in a 60,000-square-foot factory in San Antonio, despite a significant downturn in the global automotive industry's fortunes.
Today the company employs 30 in San Antonio, which works five days a week, supplying parts used by American auto makers and others, and 56 in Mexico.
The Mexico facility runs seven days a week. It customers include European and Japanese companies with assembly plants in NAFTA.
Further evidence of Schlemmer USA's diversification plans is the recent installation of four Engel injection molding presses — two 220s and two 330s — in San Antonio.
“We have a few [injection molding] contracts from the automotive industry,” said Iyengar, an engineering graduate from Mumbai University who also has an MBA from Roosevelt University in Chicago, where he entered the extrusion industry. “We'll be making cable channels, troughs and caps and probably other accessories also,” he said.
In Mexico, the company moved into a new factory with 50,000 square foot of covered space in January. “When I took over this [Mexico] plant had only six extrusion lines,” said Iyengar. “Now we are up to 11 and have plans to put in another four by the third or fourth quarter of this year.
“In the United States we started with four. Now we are up to seven and will add three more this year.”
Most of the extruders are made by Davis-Standard LLC of Pawcatuck, Conn., and Unicor GmbH of Hassfurt, Germany.
In dollar terms, Schlemmer USA's sales grew in excess of 60 percent from the start of 2009 through 2011, according to Iyengar, who nonetheless declined to reveal the figures.
However, “in 2010 we used 500,000 pounds of resin in San Antonio,” he said. “Last year, with full production, in both locations we used over 2.5 million pounds.”
By the end of 2012, he added, “we're planning to double the 2.5 million pounds.”
“I'm focusing on areas that are non-automotive and automotive areas where we can become a major player,” Iyengar said. “We have a good game plan for the next three years and see where our growth will be. We want to manage our growth well.”
For example, the company wants to be a one-stop shop for the wire harness industry and is planning to add different types of machinery to be able to offer such services as laser welding.
It is also seeking materials that withstand heat in the car engine department, Iyengar said, explaining that mandatory fuel efficiency regulations and emission controls have increased the under-hood heat of all cars by as much as 30 degrees in the past few years.