Hexpol streamlines North American operations with Texas closure, Alabama divestiture

BURTON, Ohio—It's no secret that Hexpol Compounding Americas wants to be in the top echelon of rubber suppliers in all the markets it serves.

Remaining there sometimes requires addition by subtraction.

As such, the largest compounder in North America, at about 1.3 billion pounds of custom mixed rubber annually, has divested an engineered products facility in Muscle Shoals, Ala.; and will close another in Kennedale, Texas.

"Both decisions are certainly not a reflection of the skills or commitment of the Kennedale and Muscle Shoals work forces," Gary Moore, president of HCA, told Rubber News from his office in Fort Worth. "We view these decisions as necessary to maintain our competitiveness and to focus on our core business to improve our supply chain to support our customers most effectively."

The Muscle Shoals facility, Robbins L.L.C., which represented about $7 million per year in net sales for HCA, was sold to Atlanta-based Karo Ventures L.L.C. in a deal that closed Jan. 11, 2024.

"We are all-in on the business—its people, its products and the tremendous, untapped potential of the facility," Karo partner Kent Allen told Rubber News. "More than anything, we recognize the responsibility of carrying forward the legacy of a 100-plus-year-old brand, and we are excited about the opportunities ahead."

According to Moore, Muscle Shoals once had a custom mixing production line with a 320-liter mixer, but in recent years only produced final products, namely curing bladders and envelopes for retreading tires.

And the final products space quickly is becoming a "non-core business" for HCA.

"No other HCA location is producing final products," Moore said. "Once upon a time that (Muscle Shoals) plant had mixing ... but it required full refurbishment. It ended up being a warehouse location, a hub that spoked out from there.

"For how we manage our operations, it was not a necessity."

Hexpol previously did own a larger share of the bladder and envelop market, however other suppliers have stepped in.

"And there are still others out there," Moore said. "For Hexpol, this was not something we were going to grow in terms of a further acquisition right now. It made sense to divest it and have someone come in who wanted to grow the business, versus us staying in that smaller position."

Hexpol will remain in Karo's supply chain, however, providing compounded rubber for the bladders and envelopes—but Karo now will produce the final products using its own molding processes.

"We have entered into a (5-year) long-term supply agreement with Karo to provide rubber compounding for these applications," Moore said. "We continue to concentrate on our core competence of custom compounding. I think you know we want to be No. 1 or No. 2 and in any market, and in the envelope market our position was sliding.

"It was the only facility within my responsibility that made final products and it just made sense to divest."

HCA will provide the compounded rubber for the Muscle Shoals products out of its Dyersburg, Tenn., mixing facility.

According to Moore, all 31 employees in Muscle Shoals had transferred under Karo by Nov. 1, 2024. Karo has since increased the work force to more than 40 employees, Allen said.

"Karo was drawn to Robbins for several compelling reasons," Allen said. "First and foremost, Robbins L.L.C. has a century-long legacy of excellence in all things rubber ... and the facility itself offers significant untapped potential for growth and innovation. The site's infrastructure, skilled work force and existing customer relationships make it a strategic platform for expansion in the custom molding and specialty rubber markets.

"For Karo Ventures, this acquisition is more than just a financial investment—it's a long-term commitment to American manufacturing and the associates that choose to be a part of Robbins."

In Texas, the Kennedale location, with 42 employees, is set to be shuttered by June 30.

The plant produces several compounds for the rolls industry, oil and gas products and some performance additives.

"The plant requires a significant amount of investment in the next two to three years for M&E refurbishment," Moore said. "Rather than invest here, it makes sense to consolidate the activities in other HCA locations that are closer to the customer."

He said transfers will be dependent on customer location and processing requirements, but will be spread between HCA's other 11 plants in the U.S. and three in Mexico.

HCA, with about 1,600 employees, supplies compounds to automotive, at about 40 percent (weatherstripping, air and fluid management, and NVH); industrial, at about 35 percent (wire and cable, architectural sealing and highway construction); and specialty compounds, at about 25 percent (water management and oil and gas).

Hexpol Group, based in Malmo, Sweden, has about 5,000 employees and saw about $2 billion in net sales in 2024 (compounding and specialty engineered products combined).

Full-year sales at the Swedish group's compounding businesses—both in N.A. and Europe—amounted to $1.7 billion, down 8 percent year-on-year, Hexpol said Jan. 28.

North America represents about 55 percent of net revenue for Hexpol Group.