Eatery Essentials Inc., a sister company to Taiwan's Vigour Pak, is investing $19 million in a Texas plant to make PET containers for food packaging, its first facility in the United States, with a focus on recycled materials.
Eatery, which is based in the U.S. but shares common ownership with Vigour Pak Co. Ltd., plans to open the 400,000-square-foot extrusion and thermoforming facility and headquarters in Dallas in October and fully ramp up production over two years.
"We will be a vertically integrated operation," said Charles Pickering, vice president of sales and marketing at the Dallas firm. "We want to be kind of close to the vest on some of our capacities and things, but it will be state-of-the-art. We will be focused on post-consumer recycled PET."
The facility will use solid state polymerization technology, he said, to bring the recycled material "equal to or better than the [intrinsic viscosity] of virgin."
Eatery Essentials is opening the Dallas plant to shorten lead times, improve service and expand product lines for the U.S. market, Pickering said. It has plans for two or three more U.S. facilities in the next eight to 12 years, he said.
Vigour Pak, which is based in Changhua, Taiwan, has paper and plastic packaging operations there and does about $120 million in annual sales.
According to its website, Vigour has 11 extrusion lines and 21 thermoforming lines with a capacity of up to 200 million pieces a month.
"We'll just about double what they have there," Pickering said.
The company supplies disposable plastic and paper packaging to foodservice and food processing companies, along with supermarkets and grocery stores. It sees its tamper-evident packaging designs as a particular advantage, he said.
Pickering said its products can have up to 100 percent recycled PET, but it varies by product. He noted that the company faces the same shortages of recycled PET in the market that others have.
"There isn't enough [recycled material] available in the country; we're using every bit of recycled product that we can get our hands on," he said. "At the end of the day, it's unfortunate, but the U.S. does one of the worst jobs of collecting and recycling water bottles out of pretty much everyone."
The Dallas operation will use equipment from Germany and Taiwan, and getting that machinery imported and having technicians install it during the coronavirus pandemic complicates the timeline for factory startup, Pickering said.
"We're a little bit delayed with the equipment because our equipment comes out of Germany and Taiwan, and technicians are required 14-21 days quarantine, each direction," he said. "The equipment manufacturers aren't excited about losing four to six weeks of employee work time having to sit in quarantine making a round trip."
When it's fully operational, the Dallas plant will employ 150 people. The factory will also get at least 30 percent of its electricity from renewable power, the company said.
The U.S. and Taiwanese operations share some ownership overlap. Pickering said two of the four owners of Eatery Essentials also have ownership stakes in Vigour Group, which is the parent company of Vigour Pak.
The factory is being partly financed by U.S. government-backed tax credit financing, under a program called the New Markets Tax Credit, according to a June 23 news release from the Los Angeles-based National New Markets Fund LLC, which allocates credits.
The federal program provides tax credit financing for investments like manufacturing plants in economically struggling areas.
The area around the Eatery Essentials factory in South Dallas is in a "highly distressed census tract" that has a 45.5 percent poverty rate, nearly four times the national average, and high unemployment, the release said.
A community development arm of U.S. Bancorp is investing $6.1 million in the facility, in return for eligibility for tax credits of an equal amount or slightly more, NNMF said.
The program is part of the U.S. Treasury Department's Community Development Financial Institutions Fund.