BARBERTON, Ohio (July 13,2012)—Preferred Compounding Corp. is expanding its operation again, this time via an acquisition that gives it a solid base in Mexico.
The rubber custom mixer purchased JevsaMex, the Mexican compounding operation previously owned by Barcelona, Spain-based Iacp Jevsa, for an undisclosed amount.
Included in the deal is a 66,000-sq.-ft. plant in San Luis Potosi, located in central Mexico between Mexico City, Guadalajara and Monterrey. The facility will continue operating as Preferred Compounding de Mexico.
Preferred, which has been expanding organically since 2009 and has a work force of more than 200, plans to keep the factory's experienced work force of about 20 intact, according to Joe Hudson, vice president of sales and business development for the company. But it will have new leadership.
Scott Lieberman, a mechanical engineer with more than a decade in the rubber industry and experience working in Mexico, will become general manager for Preferred Compounding de Mexico and vice president of strategic initiatives for Preferred.
“For several years we have been hearing from our U.S.-based customers that they want us to fill their needs for high-quality custom compounds in Mexico,” said CEO Ken Bloom. He said the central location of the mixing plant gives the company the platform it needs to handle that business.
Expanding into Mexico is a natural growth step for Preferred, he said. “Over the last five years we've worked hard to improve every dimension of how we serve our customers with consistent quality custom compounds.” Thanks to those customers, Bloom said, the company has grown significantly.
Compounds from the new plant primarily will be supplied to customers in Mexico, Hudson said. The Barberton-based company has no plans to truck any of it into the U.S.
Lieberman—who has also worked for German automotive product suppliers Freudenberg-NOK and the Schaeffler Group along with Ford Motor Corp.—said Preferred currently is mixing rubber at the San Luis Potosi “and we are looking to expand business in Mexico at a steady rate.
“The acquisition gives us an operating mixing facility and a trained work force in the heart of Mexico's industrial area. As in the U.S., we will be a full-service, high-quality and high value-added custom compounder for companies using rubber and elastomers in Mexico.”
Preferred last expanded externally in 2006 when it acquired Associated Rubber Co. in Georgia. Included in that deal were compounding factories in Tallapoosa, Ga.; Fruithurst, Ala.; and Huntingdon, Tenn. The three facilities remain key parts of Preferred's operation. The acquired operation will become its fifth facility and does not replace any of the other factories, Hudson said.
Over the last three years, the company has focused on internal growth. After weathering the 2009 recession, it concentrated on building sales and expanding its customer base while continuously upgrading its plants, mixers and other equipment, he said.
In late 2010, Preferred was purchased by Bloom, 14 other managers and private equity firm Wingate Partners from Watermill Group, another private investment firm.
It produces proprietary and custom-mixed rubber compounds for a variety of different segments, including molders, extruders and mixers in the rubber industry. It serves a number of industries, including automotive, construction, power generation and roll goods.