SAN FRANCISCO PAPALOTLA, MEXICO — Tier 2 auto industry extruder and injection molder Schlemmer GmbH is tripling its multimillion dollar investment in Mexico, building two manufacturing plants in the next year or so and expanding an existing facility.
“We've invested between 2 million and 4 million euros ($2.2 million to $4.4 million) in Mexico and we will triple that amount, reaching about 10 million euros ($11 million), within three years,” CFO Christian von der Linde said in a July 1 interview.
Rajiv Iyengar, vice president of Schlemmer's NAFTA region operation, said in a separate telephone interview that Schlemmer also plans to add two new sites in the United States. The unit already has plants in San Antonio, Texas, and San Francisco Papalotla, in the Mexican state of Tlaxala.
A decision on where the two new complexes in Mexico will be built will be taken within the next couple of weeks, said CEO Josef Minster.
“The factory in Papalotla will be full by next year,” Minster said. “In the next 18 months we will open two new facilities in this country. I think they'll be green field but you never know. If there's a good opportunity to acquire something with good technology, we will have a closer look.”
Looking to diversify
According to Iyengar, all of Schlemmer's work in San Francisco Papalotla, where it employs 97, is for the automotive industry, although it is looking to diversify, he said.
Schlemmer, a wire protection systems specialist with two dozen manufacturing centers across the world, earned 75 percent of its 270 million euros ($298.4 million) in 2014 sales from the automotive industry, followed by industry (railways, oil and gas), with 20 percent, and appliances (launched 18 months ago), with 5 percent.
Minster said the 60-year-old Schlemmer Group, headquartered in Poing, near Munich, has set itself a global sales target of 430 million euros ($442 million) by 2020.
“For us in Schlemmer, the NAFTA region, and Mexico especially, is a very important market,” he said. “Therefore we decided to invest heavily in this region.”
Schlemmer has 11 extrusion lines in Papalotla, and Iyengar said the company will probably add two or three more.
It also has an Engel injection molding press, with a clamping force of 85 metric tons. Iyengar said three more Engel machines will be added by the end of the year, two with a clamping force of 240 metric tons and another with 330 tons. The injection molding will be used to manufacture cable channels, Iyengar said.
“Now the [company's] emphasis is on injection molding as part of the entire wire protection system,” said Jim Hilker, Schlemmer's sales director in the NAFTA region.
According to Dieter Brenner, Schlemmer's automotive market vice president, the company has 227 injection presses, including Engel, Arburg, Haitian and Krauss Maffei machines, operating around the world.
Most of the company's extruders in Mexico, where Schlemmer plans to double the workforce in the coming months, are made by Standard-Davis and Unicor.
Private equity firm Hannover Finanz GmbH of Hannover, Germany, bought a majority stake in Schlemmer from the Mackprang family in 2012. In 2014 Hannover also acquired 75 percent of the shares in Koller Beteiligungs GmbH, an interior parts supplier to OEMs in Europe, from the brothers Max and Thomas Koller.
Koller announced this month that it will begin production of lightweight trunk floors made of fiber-reinforced plastic composite sheet, among other materials, in Mexico in 2016, starting operations in space provided temporarily by Schlemmer in San Francisco Papalotla.
“The investment will be between 3 million to 5 million euros ($3.3 million to $6.3 million) and we'll employ about 50,” said Werner Oestreich, Koller's director of sales and marketing. The company produces 4 million such floors per year.
Koller is based in Dietfurt, Germany.