Ipex Group stated that its Ring-Tite brand pipes are made of high-strength, high-impact PVC compounds and used in municipal sewer systems to prevent cracks, leaks, and corrosion. The company expects that U.S. infrastructure demand will boost demand for plastic pipes in 2021.
It is expected that housing starts in the United States will rise in 2021, and economists predict that GDP growth will be higher than average, but Ipex Group Chairman and CEO Alex Meesters has another reason to feel optimism.
Operated as Ipex USA LLC, the North American subsidiary of Belgian Aliaxis SA in Pineville, North Carolina, extrudes plastic pipes for the construction, industrial, agricultural and infrastructure markets-the latter has been seriously ignored.
But this may be changing.
"We can't ignore the infrastructure investment opportunities created by the backlog of public infrastructure spending of more than $2 trillion," Meisters said of his optimistic outlook. "I firmly believe that as we seek to grow our business, the value we bring will continue to resonate with the resilient U.S. market."
Through the acquisition of Silver Line and its four manufacturing plants, Ipex achieved rapid growth in 2019, which made the company's influence in the United States more prominent
"Many of the products in the Silver-Line portfolio are either new products from Ipex or enhancements to our existing products," Mestres said. "This acquisition not only broadens our product portfolio in many areas, but also opens the door to new markets. Some examples include well casings, threaded downspouts, irrigation and drainage products."
According to Aliaxis' consolidated account business overview, 2019 was a record year for Ipex in the United States, which stated that “the average sales and gross profit margin of the top 10 customers increased significantly”.
The 75-page annual report stated that Aliaxis had sales of 3.1 billion euros ($3.7 billion) in 2019, but did not break down the results by region. However, the employee base is true. It stated that Aliaxis hired 15,511 employees in 2019, of which the Europe, Middle East and Africa divisions accounted for 38% of the total number of employees. North America ranked second with 19.3%, followed by Latin America. , India and Australia.
Plastics News estimates that Ipex's North American sales have increased to 700 million U.S. dollars, which raised it to No. 6 in the ranking, which was previously held by Trex Co. Inc., a laminate flooring extruder.
Mestres declined to comment, saying only that the experienced Silver Line employees are Ipex's assets.
“Given the fierce competition in our job market, the importance of welcoming approximately 350 highly qualified people to join our team cannot be overemphasized,” Meisters said. "We have a common vision for the future, and now we all benefit from the new capabilities and skill sets we collectively bring to the benefit of our customers.
One year after integrating Silver Line and expanding its distribution footprint, Ipex is ready to grow again.
"We remain active in making more acquisitions in North America," Meisters said, describing the target as "a company with significant fit and significant growth synergies."
Ipex currently has 11 manufacturing bases and 11 distribution centers in the United States, and 26 manufacturing bases and 26 distribution centers in North America.
According to data from the United States Census Bureau, regarding the prospects for further sales growth, Mestres pointed out that the number of new housing starts in the United States has increased, with a seasonally adjusted annual rate of 1.53 million in October. This is 4.9% higher than the revised 1.46 million in September and 14.2% higher than the 1.34 million in October 2019.
"It is expected that housing starts will continue to rise in 2020," Meisters said. "Similarly, economists predict that GDP growth in 2021 will be higher than average, generally estimated at 3.3%, and business investment is expected to increase by 3% next year."
On top of that, President-elect Joe Biden has a $2 trillion Build Back Better plan that calls for investing in schools, water systems, municipal transit and universal broadband. Getting the plan of the incoming Democratic president to pass Congress requires cooperation with Republicans. But many people hope to reach a compromise.
"The United States provides Ipex with the potential to continue to increase our participation in a large growing market and build new customer relationships, while exceeding their expectations," Meister said. "Despite the impact of the ongoing pandemic, we are encouraged by some short- and medium-term economic indicators, and we are optimistic about the future of these areas in which we participate."
In order to bring a wider range of products closer to customers and end users, Ipex opened a new center in Joliet, Illinois, expanding its distribution footprint in North America, which is also its second location managed by a third party.
In addition to the distribution center in Cincinnati, Taag Logistics also oversees the site. Mestres stated that the partnership allows Ipex to expand its inventory to meet the needs of customers in the municipal, plumbing, electrical and industrial markets.
"This provides a competitive advantage, we can flexibly store products for a specific market on a distribution site, or combine different products for different markets in a distribution center," Mestres said.
He expects that as Ipex grows, it will open more distribution centers.
Ipex's growth strategy also requires its R&D team to create the next generation of plastic pipe products.
The Aliaxis report stated that the North American team accelerated the research and development work and also helped Aliaxis Italy develop a new one-piece valve that was previously unavailable through the company. The small-bore valve was launched in North America in September 2019.
The North American R&D team supports the development of new products in multiple regions. Aliaxis said that this cooperation can also save raw materials and reduce production costs.
"Our world-class R&D team continues to challenge the limits to create and provide the next generation of new plastic products and solutions," Meister said. "Our goal is to continue to implement our customer-centric approach to organic growth, invest in R&D and innovation, and target acquisitions of companies with significant fit and significant growth synergies."
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