Jaeger plans $3.8 million investment in Unitek unit

By Brad Dawson ERJ staff (R&PN)

Laporte, Indiana -- A German rubber parts firm has purchased Unitek Sealing Solutions Corp. and plans to invest about $3.8 million in equipment and upgrades at the extrusion specialist's LaPorte operation.

Hanover, Germany-based Jaeger Group acquired Unitek's assets from CEO and Chairman Jeff Bernel effective Aug. 5. The two companies had been in discussions over a potential sale-financial terms of which weren't disclosed-for the past 18 months, said Unitek President Mark Dilley. The company will continue to lease the LaPorte facility.

Unitek's new name is Jaeger-Unitek Sealing Solutions, with Dilley continuing as president. Bernel, who formed Unitek after buying the thermoplastic extrusion business of American Rubber Products Corp. in 2006, is no longer involved with the company, Dilley said.

Bernel served as ARP president from 1980 to 1996 and afterward taught business at his alma mater, the University of Notre Dame, before starting Unitek. He is returning to Notre Dame to teach, said Dilley, who also served as co-president with ARP before joining Unitek in 2006.

Building up

Jaeger-Unitek's plans for growth in LaPorte are aggressive, Dilley said, with at least six injection machines for rubber and thermoplastic elastomer molding-more if necessary-being added between De- cember and June 2011. The operation also will acquire two cryogenic deflashing machines and robotic inspection equipment, he said.

The plant's current capabilities include a sponge rubber extrusion line, a solid rubber extrusion line, a dual-durometer TPE line, a tri-durometer TPE line and four small plastic injection molding machines. The 150,000-sq.-ft. facility has the space to handle the expansion, but Dilley said he believes the operation at some point will outgrow its site and need to look for another location.

The company also will double employment to about 80, adding nearly 40 workers at the plant by September 2012, he said. Jaeger-Unitek is hiring people now to be trained on equipment in Germany.

The state of Indiana has sweetened the deal for Jaeger-Unitek in its job-creation efforts, offering the company through its Economic Development Corp. up to $250,000 in performance-based tax credits and $20,000 in training grants.

Sharing strength

The sale will help Unitek build and complement its capabilities in rubber and TPE extrusion of automotive components, particularly seals for power window, door and sunroof assemblies, Dilley said.

Jaeger's specialties include rubber profiles, rubber-to-metal components, mats, hoses and other products for the automotive and general industry sectors.

The combination of resources-Jaeger is a $150 million company-and strengths creates “cross-pollination” possibilities for the German firm and its new subsidiary. Jaeger manufactures a high volume of rubber parts in its home market, and some of that production will be coming to LaPorte, Dilley said.

About 70 percent of the Indiana operation's revenues come from sales to Japan, a country where Jaeger is looking to build business. There will be a push to increase North American sales as well, he said.

“The sale has provided us with a new potential customer base,” Dilley said. “Jaeger is strong in the German end of the industry, and is presenting us with new product opportunities in TPE and rubber molding. We've been an extruder, and now marrying that expertise to injection molded products, we see that as a great opportunity.”

TPE components make up about 60 percent of Jaeger-Unitek's business, but Jaeger's focus on rubber and the influx of rubber part manufacturing at the plant likely will even out the rubber/TPE revenue breakdown, he said.

The company uses a variety of elastomers in its production, including EPDM, nitrile, natural rubber and Neoprene. Its plastic materials include TPEs, thermoplastic olefins, polypropylene, nylon and polyvinyl chloride.

About 85 percent of Jaeger-Unitek's business is in the automotive sector, and that focus should continue over the next one to two years, Dilley said. But he believes the nonautomotive business could grow in the wake of the sale.

Jaeger brings other strengths to the table, as well, including a prowess in technology and automation that fits well with the demand for quality in the automotive arena.

The only way to meet the need for 100-percent inspection, for example, is through automation, he said, and the LaPorte plant will soon be equipped with robotic cameras.

The company also has a strong balance sheet that brings future stability to Jaeger-Unitek for the near future. The recession the past couple of years was difficult for Unitek, as sales were cut in half in 2008 and early 2009, Dilley said, though the firm has seen most of that come back.

“We're excited about what's happening here,” he said. “There aren't a lot of employers in our area that are expanding right now, and we believe concerns about our ability to grow are behind us.”

From Tire Business (A Crain publication)

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