Octal Extrusion Corp. is spending millions of dollars to expand operations in suburban Cincinnati, a project that will include installation of another extrusion line.
The Muscat, Oman-based company is known for its direct PET manufacturing approach, which allows the company to create sheets directly from molten resin. The process unique to Octal eliminates the need to create pellets that are then heated and extruded into sheet.
Octal's facility in West Chester, Ohio, takes recycled PET flake from its thermoforming customers in North America and extrudes the material into new sheet. Initial construction at the facility that opened in 2015 included two extrusion lines.
"Cincinnati has really been a linchpin for growing our sheet business out of Oman," said Joe Barenberg, chief revenue officer for Octal.
"We're growing Cincinnati because the North American sheet business is growing very aggressively for us. We need that capacity that is coming on to continue to consume the flake that is coming back from our customers, which is increasing in volume on a steady basis," he said.
"Basically what you have is you have a spoke-and-wheel strategy where you make product, ship it to the U.S. or elsewhere and you recycled it," Octal CEO Nicholas Barakat added.
Equipment has been ordered and engineering is now taking place for the $7.5 million expansion that also includes additional material handling and storage capabilities.
"We're hoping to get everything in mid-next year. We're pushing as fast as we can," Barenberg said.
Octal originally took enough space in West Chester to allow for growth over time.
"We started with two machines, but we're capable of expanding up to five machines. We have very large ambitions to grow in North America. And we wanted to make sure we weren't space constrained," he said.
Barakat indicated current operations at the U.S. facility "are running flat out."
"We have invested heavily in recycling capabilities, not only to recycle the flake ... but also to process it at a very high quality cost effectively," he said.
Octal expects to add about 20 workers with the new extrusion line at the facility that now employs about 50. Octal also sees the potential of adding a fourth extrusion line in the not-too-distant future, but there is no specific timetable at this point. A fourth extrusion line would add about another 20 jobs.
News of the Ohio growth comes as Octal is talking about plans to spend some $100 million to further expand the company overall, including the U.S. work. Barakat indicated the company expects to spend about $30 million on fixed assets and devote another $70 million in working capital to the effort.
Company expansion will include new equipment at the company's production site in Salalah, Oman, as well. That's where the company makes DPET sheet as well as PET resin.
While Octal's business model is designed to supply PET sheet to customers that convert the material, the company also operates its own packaging operations in Riyadh, Saudi Arabia, for the dairy business. "This is for us to understand the market, understand how we deliver efficiencies to large users," Barakat said about the converting business.
"It's our belief that the DPET technology is really the driver for thermoform packaging to expand in PET at the expense of other materials, generally," Barenberg said.
The company looks at the inroads PET has made in the fiber business over the years and sees a similar opportunity for sheet. So Octal is working to "get the right collection of performance attributes to target very specific large scale markets that are probably currently in some other polymer."
"There's an overlapping to performance attributes which are prevalent to all of these polymers," Barakat said. "They all do something. The question is who does it best? So there is a lot of substitution, even if it's temporarily.
"What we don't want to be is have a bunch of really expensive, small market products. We're about bringing good things to the market that change the value proposition for people in everyday life. And that's only possible when we find clever ways to get performance at high-volume, low-cost manufacturing throughput," Barenberg said.
Octal calls itself the largest PET resin and sheet producer at a single location.