Kraiburg TPE GmbH KG & Co. recently broke ground on its new U.S. headquarters in Buford, Ga., in metro Atlanta.
The expansion project for the 65,000-square-foot building amounts to a $15 million investment, Kraiburg said, and is expected to create more than 20 new jobs over the next five years.
“It's the largest capital investment that our company has made outside of Europe in our company's history, so it's fairly significant in that regard,” said Jeff Frankish, managing director for Waldkraiburg, Germany-based Kraiburg TPE.
Kraiburg currently occupies a leased building where it has been since 2002, he said, which was the year the company first started to produce thermoplastic elastomers in North America.
“This is the only location that we have throughout North, Central and South America, and we do produce and supply into Mexico and in South America,” Frankish said.
The company started looking for other options for two specific reasons.
“We're simply running out of space, and given the fact that our lease was going to be coming up in August of 2016, we started taking a look about a year and a half ago what our options would be,” he said. “The space limitations that we have here are not only for our office space but also from a production standpoint; we don't have enough room to add another production line to our existing facility.”
Kraiburg decided to make the capital investment to purchase land and “to build a state-of-the-art compounding facility here in the Atlanta area rather than simply leasing another building or a bigger building,” Frankish said. “We wanted to establish a more permanent presence in the Americas, and at the same time, we wanted to make sure that we did everything we could to retain the employees we have here.”
Kraiburg has spent a lot time and money equipping employees with tools, resources and knowledge they need to manufacture its products, he said, so one of its priorities with the move of the headquarters was to retain employees. This meant searching for locations that would not be too far away from its current location in Duluth, a suburb northeast of Atlanta. The new headquarters in Buford is about 15 miles farther northeast.
The company is in the process of building “basically a greenfield facility at that site,” Frankish said.
Construction on the Kraiburg TPE facility is scheduled for completion in 2016.
An additional production line has been ordered and timed to be delivered with the completion of the new building. The company plans to move all the existing equipment to the new facility during the first quarter of 2016.
“Essentially what we're going to do is we're going to expand our capacity from our current 6,000 tons to about 10,000 tons with the new production capability,” Frankish said.
The jobs that will be added at the location will be in operations, he added, including warehouse workers, production operators and other jobs.
In anticipation of the move, Kraiburg invested in its support staff, including sales, business management, financial and customer service, increasing staffing in the area by about 60 last year.
“As far as our product lines are concerned, we're not going to have any additional capabilities to produce products that we don't currently produce here. We're simply expanding capacity,” Frankish said, although he said that could change in the future.
For instance, Kraiburg manufactures some specialty TPE grades in Germany for the medical industry that it does not have the ability to produce in its U.S. headquarters. Although Kraiburg is not planning, in the short term, to add that capability, the facility is designed for up to eight production lines, Frankish said. As the company adds additional lines beyond ones already in motion, the company could consider adding capabilities to produce some of those specialty grades.
One key point about the move is that although there is only going to be an additional 5,000 square feet in the new facility, it will be set up more effectively, Frankish said. “Our current facility is not configured very well for the type of production process that we use,” he added.
The new facility will be customized for more efficient production, including materials and production flow.
Kraiburg said it expects to add 9,000 square feet by 2018, resulting in a total 74,000-square-foot facility.