American Renolit sees steady gains in the film market

LA PORTE, IND. — The massive film plant on East Lincolnway in La Porte started production in 1965. But back then it was part of packaging company Hedwin Corp.

Solvay Industrial Films took over in 1991, and the plant switched to making polypropylene roll stock.

The PP film has changed since then — imports from China made it more of a commodity business. But the factory has still managed to more than double in size, and it's completely remade itself as a major North and South American supplier of calendered PVC film.

That's the story in American Renolit Corp. in a nutshell. The company has changed its product mix, changed its customer base and managed to grow in a market that was initially skeptical about the capabilities of calendered film.

“Before Renolit came to the United States, calendered films were known as thick films, not high quality,” said Ralph Gut, president of American Renolit.

Gut has been in the United States for five years, and he will be heading back to Germany in October to manage the company's headquarters plant in Worms, Germany.

 Convincing some customers to try calendered film wasn't easy.

“Some of our customers are cast film manufacturers,” Gut said. So Renolit had to prove to them that it could supply a high-quality, easy-to-process film that's lower in price than cast film.

Laura Schied, the company's new business development and marketing manager, said American Renolit has enabled converters to broaden their portfolios, offering higher-priced cast films as well as lower-priced calendered film with similar product features.

“The Renolit technology allowed it to manufacture new calendered films which have strongly improved performance and thus have conquered the U.S. market,” she said. “So for the converter, it was not the question cast or calendered.”

But Gut and Schied say that they're not only competing on cost. The bigger selling points for Renolit are things like processability, technology and new product development.

“We are a very technology-driven company,” Gut said. “We spend a lot of money on our equipment. It's our choice, and the market allows us to do it.”

Calendering is a fascinating process to watch. It starts well in advance of the actual processing, when the company blends PVC resin, colorants and additives in big batches and sets them aside. When the time comes to make the film, the giant containers of paste are transported to the machine, where it is extruded onto a roll, then pulled through the machine to precise thicknesses and widths.

When Solvay Industrial Films started production in La Porte in 1991, the factory made plastic sheet, including material used for protective inserts for baseball cards and photo albums as well as products for compact-disc holders.

Renolit, which bought the plant in 1998, called that the stationery business. These days, you won't find much of that business in La Porte.

American Renolit has phased out that lower-margin work, although the company still makes PP film in China — which is a big growth market for the German parent company. Today, about one-fifth of Renolit global employees are based in Asia. Much of the business is in medical film.

So China is big for Renolit now, but the U.S. operation has been growing quite steadily, too. You can see that by tracking the company's manufacturing capacity. American Renolit installed its first calendar in 2000, and a second in 2001. The third came in 2003, and the fourth in 2008.

The company still has room for a fifth calendering line, and Gut thinks it may come in a few years.

“We did a business plan last year that looked at an investment of $20 million in a new line. But we decided that for now we'll serve the growing market by debottlenecking the existing lines instead and importing some films from Europe,” Gut said.

“Looking forward, it's probably on the horizon in the next two or three years, that we will add a line.”

Renolit Group manufactures all kinds of plastic films, primarily from PVC. The company has annual sales of about 900 million euros ($1.2 billion) and employs 4,500 around the world.

The La Porte plant is a major facility for Renolit, with 175 employees, annual sales of more than $85 million, and annual capacity of about 15,000 tons of film per year.

How has the company continued to grow when it jettisoned its largest business — stationery films? The secret has been to go up-market. The largest market for American Renolit now is in flexible films for pressure-sensitive applications. Products like signs and graphics, car wraps and displays are big, and the La Porte plant features them everywhere. Even the silos, visible from the main road through town, feature colorful graphic films.

Being part of a bigger company means sharing new products and technologies. Gut and Schied are excited about the potential for things like exterior surface films — used on window frames in Europe to give them a durable wood-grain appearance — and in smart films.

The company has developed, but not commercialized, a flexible film with antimicrobial properties, for example. It has commercialized an anti-graffiti facade film with easy-to-clean properties, and films that can replace tin-based paint in marine applications.

“Renolit is very committed to developing new products, and also trying to find new markets for products,” Schied said.

As a manufacturer of PVC films, the company is sensitive to issues about sustainability. That includes sticking up — and supporting — efforts to ensure that PVC is being recycled, and being flexible about plasticizers, depending on customer preferences.

“I'm very much into real sustainability. Reducing waste, saving energy, protecting the environment. And increasing the awareness that PVC enhances the properties of our daily life,” Gut said.

“Reputation is important for the company,” Schied said. “There's a lot of discussion about green products. And at Renolit, we want to make products that last. It's part of our daily life and our operations. We are proud about that. Especially in America.”

On the plasticizer issue, Gut said there is an advantage to being part of a large company that has done the research necessary to use different materials — including non-phthalate materials — and adapt to new regulations.

The 200,000-square-foot factory is focused on adding value for customers, not just churning out pounds of PVC film, Gut said.

“We really focus on what adds value — consistency and reliability. We hear from our customers that these things are important to them,” Gut said.