Avon Rubber to expand US site

ERJ staff report (R&PN)

Cadillac, Michigan - Avon Protection Systems Inc. plans to expand one of its two US factories and add workers to handle a sisable boost in gas mask production.

The wholly owned subsidiary of Wiltshire, England-headquartered Avon Rub- ber P.L.C. earmarked about $600,000 to add 25,000 square feet to almost triple the size of its 15,000-sq.-ft. factory in Cadillac, according to Mike Hamner, vice president of operations.

He said that no significant equipment purchases are expected with the addition.

The firm also operates a landlocked facility in the city, he said, that spans about 70,000 square feet. The Cadillac factories are the primary manufacturing arms of Avon's protection and defense division.

Avon Protection Systems expects to add 60 jobs at the plant-where it makes the M50 series range of chemical, biological, radiological and nuclear masks-in the next year, he said. It presently has a work force of about 260 employees at the two sites.

Investment grows

The latest investment brings to about $25 million the amount Avon Protection Services has spent to upgrade, expand, and add technology and products at its facilities. Last year alone, the company spent $5 million to launch and produce new filters.

Avon Protection Services primarily produces masks for the US Department of Defence, Hamner said, but of late it has branched out into the commercial arena to other markets, including first responders, the gas and oil industry, and others.

That prompted the company over the last few months to begin looking at ways to boost production at its plants in Cadillac where, he said, space is at a premium. Expanding the smaller factory and work force to boost capacity was the best solution to resolve the problem.

The manufacturer hopes to break ground on the project in the next month if the weather permits, Hamner said. If that happens, the addition should be complete by mid- to late-summer.

Avon Protection Services will receive a big boost as it moves forward with the expansion project. The Michigan Economic Growth Authority has approved a state tax credit valued at $596,354 spread over six years to aid the company as it creates jobs.

The protection and defense operation in Cadillac has been the brightest unit in Avon Rubber P.L.C.'s group of businesses during the last few years. And its rubber dairy products unit, especially its operation in the US, continued to gain new ground.

Leading positions

In the firm's year-end financial report and company update, Chief Executive Peter Slabbert said Avon has established global leading positions in its protection, defense and dairy businesses.

He said protection and defense will continue to develop through its often sole-source respiratory mask status with the US Defence Department “and the resultant spin-off sales into military and homeland security markets globally.”

Slabbert predicted Avon's access to external development funding and its commitment to invest in its businesses to remain a leader of respiratory protection technology will open the door to new customers and markets.

He said the rapid growth of the M50 series of gas masks along with the addition of powered air products, escape offerings, a range of consumable filters and integration with other CBRN products will drive growth in its core defense and homeland security segments, and create opportunities in the industrial, medical and fire department product markets.

In an interim management statement, released Jan. 25, company officials said first fiscal quarter results showed an improved financial performance over a strong first period in 2010.

It did note, however, that the firm's units doing business with the US government have experienced some delays in the release of funds prior to approval of the 2010-11 budget, but the company expects the issue will be resolved during the second quarter.

Avon said it has seen an improved level of activity in the US homeland security market and its fire protection business was performing ahead of the corresponding period last year. In addition, the firm landed a significant mask order from Saudi Arabia for delivery later this year.

Avon's dairy product sales also have been robust during the first quarter, with revenues up significantly over last year, the firm said.

From Tire Business (A Crain publication)

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