Israel-based Plasgad setting up US production with RPM in North Carolina

An Israeli reusable plastic packaging injection molder is spending millions of dollars to expand into the United States, working with an established company to create a new entity.

Plasgad Ltd. is working with RPM Plastics LLC of Statesville, N.C., to create a U.S. operating unit called Plasgad USA LLC.

The new company is jointly owned by Plasgad and John Hobson, the owner of RPM, a company that makes new products and provides service to other plastic product manufacturers.

Plasgad USA now will control the product manufacturing aspect of the Statesville location while RPM will separately continue its other operations, including equipment service, installation and relocation for other firms.

The deal includes more than 20 injection molding machines for Plasgad to make its product line of reusable plastic pallets, bins, containers and crates. The manufacturing site employs 35 in 100,000 square feet.

Plasgad made the investment after examining the U.S. market for reusable packaging and seeing continued growth in that part of the business.

"Plasgad identified this huge potential few years back and started to build its Go to Market strategy to the U.S. market. This recent acquisition is another stepping stone in implementing its strategy towards the U.S. market," company spokeswoman Naama Konin said in an email interview.

"We believe that our [research and development] capabilities are well fit to the needs of the U.S. market and now that we have our own local production base in the U.S. we can grow our business dramatically," she said.

The creation of Plasgad USA will allow the company to considerably increase U.S. production, bringing the company closer to customers, CEO Ofer Karmon said in a statement.

Plasgad already has two production sites in Kibbutz Gadot and Kibbutz Gesher Haziv.

Work to establish a U.S. presence began in 2016, Konin said.

"We started with a study regarding the American market [industry, main players, segments, etc.], then we began to search of a suitable location for our operations in the states," she said in the email interview.

The company focused on the Midwest, Northeast and Southeast and found RPM, "which perfectly fitted our needs," Konin said.

RPM started as a subcontractor for Plasgad in 2017.

While this is the third production facility for Plasgad, the company actually has a sales and distribution network that includes more than 90 locations in 40 countries for its thousands of customers, according to the Plasgad website.

Markets for Plasgad include agricultural, pharmaceutical, food and beverage, electronic commerce, fashion and do-it-yourself.

Exact terms of the new business were not disclosed, but Plasgad indicated the deal "involves investing millions of dollars" to buy into the production site.