Turkey's Elastron opening compounding plant in US

Turkish plastic compounder Elastron Kimya A.S. is investing $10 million to open a factory in the United States, its first outside its home country, to meet growing demand in automotive and other markets.

Elastron, which makes thermoplastic elastomer compounds, said in an interview at Fakuma that the facility near Atlanta will come online in 2018.

The firm also said it plans to open a compounding plant in China in 2020.

"We are growing very fast and logistics was a very big issue for us, so we decided to open a factory in the United States," said Serif Erdogan, research and development manager with the Gebze, Turkey-based firm.

The U.S. plant, in Gainesville, Ga., will start with two extrusion lines and annual capacity of 3,500 metric tons (7.7 million pounds), but the company is targeting 6,000 metric tons (13.2 million pounds) by 2020, he said.

"We are very strong in the automotive market and growing very fast in the automotive, construction and consumer applications," he said.

The U.S. facility will make thermoplastic vulcanizates compounds, along with styrenic block-based copolymers and TPEs.

Erdogan said the U.S. market is more accepting of those materials than other markets because TPV was first developed there.

"The TPE market is really huge in the United States," he said. "The U.S. market knows TPE much more than Europe or ​ other continents."

Erdogan said Elastron began compounding TPVs and SEBS materials in Turkey in the late 1990s and was one of the five initial European licensees for Shell, now Kraton's, materials at that time.

The new plant will have 30 employees and is under construction. Trial production and training of operators will star in the first quarter, with a target commercial opening in June or July, he said.

The company has had a sales office in Detroit since 2009 and will keep that location, he said.

The Atlanta investment is not the company's only international plan.

Elastron wants to build a factory in China in 2020, likely about the same size as the U.S. facility or "maybe a bit more than Atlanta because we are selling more" in China, Erdogan said.

"It is a definite plan because we are growing very fast in China," he said. The company has an office in Shanghai and a warehouse in Hong Kong.

Erdogan said the privately owned company has a capacity of 20,000 metric tons (44 million pounds) a year at its headquarters plant in Gebze, with annual sales of about 45 million euros ($53.1 million).

Elastron started in 1980 as a compounder of materials for shoe soles and moved into TPV and other more technical materials in the mid-1990s.

The auto industry is its largest end market and accounts for about 35 percent of its sales, he said. It also serves wire and cable, food packaging, appliances and medical markets, he said.