Flexible plastic foam producer Armacell LLC is investing in North American production to boost capacity and upgrade.
The Chapel Hill, N.C., company said Oct. 18 that is expanding crosslinked polyethylene block or "bun" production capacity in Spencer, W.Va. The project will double North American capacity to meet anticipated growth among its largest customers. The expansion complements XPE block production in South Holland, Ill. The West Virginia operation sells mainly in the Eastern United States while the facility in Illinois serves Central and Western U.S. markets. The Illinois unit's XPE roll and sheet production will be upgraded.
Armacell also noted in an Oct. 18 news release that it will expand production capacity for continuous XPE roll and sheet production in the Yukon, Okla., plant it got when it bought the PE insulation business of Nomaco Inc. early this year. New high-performance roll lines are destined for Oklahoma. The Yukon operation employed about 80 when Armacell bought it. The former Nomaco insulation business had sales of about $28 million last year, according to a published local report.
Armacell said equipment will be installed now and through the first quarter of 2018 with completion scheduled for next summer.
Elsewhere, parent company Armacell International SA based in Capellen, Luxembourg, announced this past spring an expansion of its PET foam extrusion production capacity into China. The new PET foam line, its fourth worldwide, will begin operating late next year. Armacell also makes PET foam in Thimister-Clermont, Belgium, and Mebane, N.C., and recently started making the foam in Brampton, Ontario.
Armacell has been supplying China with its ArmaForm brand PET foam through Sino Composite Co. of Beijing. Asian demand for PET foam should benefit from a recent certificate allowing Armacell to access public projects in South Korea.
In Europe, Armacell strengthened its business in Scandinavia in March with the acquisition of Danmat Iso Systems A/S of Ølstykke, Denmark. That business makes integrated insulation cladding products based on PVC and polyurethane.
And in the Middle East, Armacell broke ground in May for a flexible foam production plant in Bahrain. Next year, Armacell Middle East Co. S.P.C. will begin producing high-density materials and elastomeric insulation for heating, ventilation and air conditioning applications. The new operation will employ about 100. The company has been active in the Gulf Region for about 10 years to supply fast growing markets.
PET foam demand has been growing in wind turbine use, where the foam forms the core of turbine rotor blades. Armacell said it also has been increasing its market share for engineered foams used in composite insulation in trucks and recreational boats.
Armacell reported a 13.7 percent hike in sales for the first half of 2017. On June 30, it posted sales of 313.8 million euros ($370.3 million) for the first half of the year. Earnings before interest, taxes, depreciation and amortization grew 9 percent versus the period in 2016. Adjusted EBITDA was 51.3 million euros ($60.5 million).
Armacell has repriced its debt to save about 15 million euros ($17.7 million) per year.
