Elastron invests $10M in US TPE plant

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Photo by Michael A. Marcotte Zev Gurion, general manager of North American operations (left), and Yuksel Habip, global business director for Elastron Kimya SA, at the company's NPE2018 booth.

Turkish plastic compounder Elastron Kimya SA thinks it's found a niche in the North American plastics market and is investing $10m (€8.3m) in a new facility in the United States.

The Gebze, Turkey-based company said at NPE2018 that it started exporting thermoplastic elastomer compounds to North America in 2012 and said it's found enough demand to justify the investment in the Gainesville, Georgia, facility.

"The response of our US customers has increased tremendously," said Zev Gurion, general manager of North American operations. "They needed a supplier that is focused on the customer and not rigid."

Elastron first disclosed the investment in October at Germany's Fakuma trade fair, describing it as a $10m (€8.3m) investment with an initial production capacity of 3,500 tonnes (7.7 million pounds).

Gurion said the company has since decided to speed the investment — he described those earlier capacity figures as "modest" — and said the facility will initially be larger. He declined, however, to provide details.

"We'll have enough capacity to address customer needs for three to five years," he said.

It's the second non-US compounder to recently announced an investment in the US market for TPEs.

China's Top Polymer Enterprise Ltd. said on the eve of Chinaplas in April that it was planning a $15m (€12.5m) TPE compounding facility, also in Georgia.

Gurion said in Elastron's case, the company made a detailed examination of the North American market and determined there was space for a very customer-focused company that could respond quickly to market needs.

"We are very excited about expanding our global production capabilities to the North American market," said Metin Mizrakli, chairman and CEO. "We are fully committed to supplying our customers with high-quality thermoplastic elastomers."

The company started 35 years ago and currently exports to 55 countries from its factory, near Istanbul.

The firm makes a variety of TPEs, including thermoplastic vulcanisates compounds, along with styrenic block-based copolymers and styrene ethylene butylene materials.

Gurion said the new facility will start with about 20 employees, but he hopes it will grow to 70 or 80 employees in five years and add more product lines.

As well, Gurion, a longtime executive in ExxonMobil Chemical Co.'s Santoprene TPV business before joining Elastron in 2006, said the company wants to add more product development capabilities to increase its ability to respond faster to the local market.

"We hope to eventually have local R&D," he said. "The key is speed to market."

Meanwhile, Elastron also said it has decided to postpone a planned investment in a similar compounding facility in China. At Fakuma in 2017, the company initially said it was targeting 2020 for a plant startup in China but now has pushed that back to 2023 or 2024.

While demand could support a new facility in China, the company decided it should focus on supporting the North American factory, its first outside Turkey, and make sure it's working before tackling a Chinese investment, Yuksel Habip, global business director.

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