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July 06, 2018 02:00 AM

Corvaglia to tackle US closure market with automation

Jim Johnson
Senior Reporter
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    Jim Johnson
    Kruger

    Atlanta — Corvaglia Group's move into the United States was the next logical step for the Switzerland-based maker of both closures and molds to make closures.

    With construction now under way at the company's new closure manufacturing site near Atlanta, Corvaglia sees the obvious potential of cracking into the U.S. market with a laser focus on serving the PET beverage market.

    "We saw that we could be successful in a high-wage country like Switzerland. We saw that we could be successful in a low-wage country like Mexico. So we figured we can be successful in the most important [carbonated beverage] market in the world, too," CEO Michael Krueger said during an interview at the recent PETnology Americas 2018 conference in Atlanta.

    Krueger was at the conference to give a presentation on mold technologies, but also spoke about the expansion plans.

    Corvaglia looked at about 60 locations in the Southeast before deciding on Newnan, Ga., as the site for a 104,000-square-foot location that's designed to eventually contain up to 20 injection molding lines.

    The company makes high density polyethylene flat caps for the carbonated soft drink, still water and hot-fill beverage markets.

    Factors such as workforce availability, transportation and market opportunities all went into selecting a location, Krueger said.

    J.B. Fisher is president of Corvaglia Closures USA Inc., the subsidiary that's developing the Georgia project.

    Jim Johnson

    Fisher

    "We looked at many, many communities all across the southeast — Tennessee, South Carolina, even North Carolina, Alabama, Georgia. We did a lot of legwork in the last nine months," he said.

    He pointed to the "community feel" of Newnan, which welcomed Corvaglia, and "a great talent pool from which to pull. Geographically, it's really nice. Our product is very freight sensitive, so the closer we are to our customers the access to transportation is huge," he said.

    Corvaglia's greenfield location is in an industrial park near Interstate 85, Fisher said. Production is expected to begin by the end of the year with an initial workforce of about 20 or so. Employment eventually is expected to reach 40 to 50.

    "It's rather high-quality jobs that we're going to create and also investing in automation at the same time," Krueger said.

    Doing business in a high-wage country such as Switzerland requires a "decent degree of automation," he said, an approach the company is bringing to the United States.

    Corvaglia began as a one-man design shop that outsourced mold production in the early days. The company eventually bought out its mold-making partner and brought those services inhouse. A partnership allowed Corvaglia to begin its first closure production in Mexico in 2003 at a site that eventually became wholly owned.

    "That was not a strategic move to start with Mexico [in closure production]. It was more like the opportunity arose. Switzerland was a strategic decision because it's the headquarters," he said. "Now, USA is a strategic move, too, because it is the most important soft drink market in the world."

    The market in Mexico relies less on automation than in Eschlikon, Switzerland, where production of closures began in 2006, Krueger said.

    Corvaglia will keep its focus on the United States before considering any other future markets. "I would say before we go into any other regions, the U.S. market, it's so big that for only one site is not enough to cover the whole U.S. So I would envision that we would build a second or even a third site in the U.S. before we turn our heads to a completely different region," the CEO said.

    But first things first.

    "We were talking about coming to the United States for a long time. Now we're finally actually doing it. We're seeing every day something is moving. And we're really excited to be here to serve the most important market with the biggest brands in the world," he said.

    Corvaglia serves Coca-Cola Co. in both Switzerland and Mexico, but the CEO said that company's corporate headquarters in nearby Atlanta were not a factor in selecting Newnan as its first U.S. manufacturing site.

    "The Southeast is a growing region. Population is growing. Growth typically means better options of winning market share of a growing market. Also, logistics seem to be favoring the Southeast because it's cheaper to ship from the Southeast to other regions than vise-versa. We felt we had a good, skilled workforce that we can employ in this region. So the Southeast was pretty clear from the start," Krueger said.

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