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August 05, 2015 02:00 AM

Radici makes a move in Mexico, upgrades in US

Frank Esposito
Senior Staff Reporter
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    Radici Group
    Radici Group's acquisition of Resinas TB SA de CV adds production with 18 million pounds of annual capacity and 30 employees.

    Radici Group has made a big move into the Mexican plastics market, even as it continues to upgrade its U.S. operations.

    Officials with Bergamo, Italy-based Radici announced Aug. 5 that the firm has acquired the nylon engineering plastics business of Resinas TB SA de CV for an undisclosed price.

    Resinas — based in Ocotlán, Mexico – employs 30 and has almost 18 million pounds of annual production capacity. The new business will operate as Radici Plastics Mexico.

    In a news release, Radici Group plastics business CEO Luigi Gerolla said that the firm has seen double-digit growth from Mexico for the last three years.

    Mexico “is an extremely attractive market for us, particularly in automotive, [which is] a steadily growing business,” he added. “The main players in the automotive industry … have been investing heavily in Mexico for some time, as have the major world automotive part manufacturers.”

    The Resinas business opened in 1945, making acetate fibers as Celanese Mexicana. It began selling nylon materials in 1970 and moved to Ocotlán in 1993.

    Resinas became independent of Celanese in 2004.

    With the acquisition, Radici “can support a series of important new projects that [the firm] is working on with auto industry players in Mexico and all of Central America,” Radici executive Danilo Micheletti said in the release. Micheletti is COO for the Radici Group plastics business in North America, South America and China.

    “We can also better support the customers we've been serving through our U.S. site, ensuring greater competitiveness in terms of both production and logistics,” he added.

    Radici also has been making improvements to its Radici Plastics USA site in Wadsworth, Ohio. The firm installed a new compounding line there last year and planning to replace another in 2016.

    Both new twin-screw lines are replacing older ones at the plant, and will keep the site's number of lines at eight, CEO Michael Cain said in a July 31 interview in Wadsworth.

    Radici now employs around 90 at the 250,000-square-foot plant. The site operates almost 60 million pounds of annual compounding capacity, mostly for nylon compounds sold into the automotive market.

    It's been five years since Radici Group bought bankrupt compounder Michael Day Enterprises Inc. for almost $6 million and renamed it Radici Plastics USA. Radici Group is a global producer of specialty plastics, chemicals and fibers, but the firm hadn't had a North American plastics site since closing a plant in South Carolina in 2007.

    Cain had been with MDE since 2001, after a 24-year career with Michigan compounder Thermofil Inc.

    “We've done a lot in five years,” he said July 31. “Becoming part of Radici gave us global supply, which we really had never had before. Now we're truly pretty lean and have made a lot of developments as far as our processes.”

    MDE had been caught in the recession that hit the auto market and the rest of the U.S. economy in 2008-09. Now the market has recovered, with North American auto builds surpassing their pre-recession levels.

    “When it stopped, it just stopped and no one was buying anything,” Cain recalled. “Now we're seeing pent-up demand, because the U.S. vehicle fleet is aging. People had been keeping their cars longer.”

    Outside of automotive, Cain said Radici Plastics USA has seen growth from heavy trucks, power tools and other electrical/electronic applications.

    Being part of a global supply chain also allows the Wadsworth plant to begin making new Radici materials soon after they're introduced. In recent years, new materials made in Wadsworth include high-heat resistant nylon compounds. The site also makes Radici's Heramid-brand compounds using recycled nylon.

    The Wadsworth plant's production has increased an average of 8 percent per year since 2010, Cain said. On the sales front, the unit's 2015 sales are on track to be up more than 10 percent, with sales growth for 2016 expected to be in the 8 to 10 percent range.

    “We're focused on the North American market. And looking strategically at what we need to do and where we want to be,” Cain said.

    Mexico City-based correspondent Stephen Downer contributed to this report.

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