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By Bob Moser
CORRESPONDENT
Published: January 17, 2014 1:23 pm ET
Updated: January 17, 2014 1:33 pm ET
Corry, Pa.-based Viking Plastics has reached a deal to co-own and operate injection molding company Injequaly Indústria e Comércio Ltda., located outside São Paulo, Brazil, the companies announced Jan. 16.
"We're excited to enter the Brazilian market with a footprint on the ground, and expect to have similar success as to when we entered the China market," Kelly Goodsel, president and CEO of Viking Plastics, said in a telephone interview. The company also operates a 20,000-square-foot facility in Suzhou, China, (Poly-Cast Suzhou), serving that local market with engineered, injection molded and assembled sealing products.
Viking currently ships to up to 10 different multi-national customers in Brazil and South America from its U.S. plant, and costs like transportation, duties and taxes typically add 40 percent to a product's end-price, Goodsel said. Producing in Brazil will save customers from those costs, and allow them to run with lower inventories and have better service.
Operating since 2002 with a 2,000-square-foot facility in Itaquera, Injequaly has seven injection molding machines ranging from 65-300 tons of clamping force. It molds tight-tolerance products in medium to high volumes for automotive, consumer and industrial customers.
Viking is acquiring a 50 percent stake in the Brazilian firm, Injequaly President Fernando Esteves said. Goodsel declined to confirm the size of the stake acquired, or the value of the deal. The negotiating process began between the two companies in February 2013 with a deal reached in November, Esteves said.
"This partnership opens some markets and clients to Injequaly that we may not have been able to reach without an American contact," Esteves said. "We're also trying to enter the automotive and transportation markets soon, and grow our sales to South America. Today we sell some parts in Uruguay, Argentina and Chile, but through [a third-party distributor]."
Incorporating Viking into Injequaly's operations in Brazil will be a process that may take all of 2014, Goodsel said.
"Like any other partnership there will be a learning process," he said. "This year will involve feeling everything out and putting our systems in place. In China it took us a few years to get our feet on the ground." | |
