Italian company to build $11.5 million plant in U.S.

FLORI, Italy—Italian compounder So.F.Ter Group is investing $11.5 million to build its first U.S. plant while also making long-term plans for expansion in Asia that will lead it to becoming a global player.

"We now have four plants in Europe, and we''re already in Mexico and Brazil. Our priority was to complete the coverage in the Americas and Europe and move on to Asia," said Ricardo Meucci, commercial director for So.F.Ter Group, in recent telephone interview.

The company expects to build a plant in Chennai, India, in 2014—building on a distribution agreement with Kohyei Trading India Pvt. Ltd. that begin this year—and in China in 2016, although it does not have specific plans yet for China.

The new plant in Lebanon, Tenn., will produce, develop and sell engineering plastics based on polyamide, polypropylene, thermoplastic elastomers and other materials targeted to the U.S. market. So.F.Ter, based in Forli, will begin construction in July and hopes to launch production by the end of the year.

The initial capacity is 50 million pounds, with 50 employees in a 100,000 sq.-ft. facility. The 21-acre site is expected to expand eventually to 150 million pounds of capacity, 150 employees and 250,000 square feet.

The location will give So.F.Ter better access to an expanding U.S. auto market as well as customers in the appliance, construction, electrical and electronics industries and firms throughout the Eastern and Midwestern U.S., said Mark Rodden, managing director for the U.S.

Existing capacity in Silao, Mexico, will help balance out demand in Mexico and the western U.S., while production in Campo Bom, Brazil, covers customers in South America.

"It''s really difficult, if not impossible, to be everywhere, but (we want to) be in a majority of the areas in the industrial world," Meucci said.

So.F.Ter was formed in 1980 to supply the shoe industry. The company has been on a growth pattern for the past several years, buying the European operations of Matrixx Inc. in 2008 and Italy''s P-Group in 2011. It opened in Brazil in 2005 and in Mexico a year later.

With the new presence in the U.S., the company is looking to build on its experience and reputation with global customers, Rodden said. The expansion will be timely for the expected growth of key customers in the auto market.

"We think for the U.S., we are going to get a double effect, both thanks to (our) globalization, and the second because the American market in itself is expected to grow in the next five to 10 years," Meucci said.

So.F.Ter saw $330 million in sales in 2012 and lists itself as one of the largest independent compounders globally and one of the three largest in Europe.

The distribution agreement in India announced in February places the firm in position to get its products on the market now while preparing for its own facility next year.

So.F.Ter will launch the U.S. business in October at the K 2013 trade show in Dusseldorf, Germany.