Zotefoams plc (LON:ZTF) Chief Executive Officer David Stirling caught up with DirectorsTalk to discuss commencing production at their new plant in Poland, how they will increase flexibility and responsiveness, what will be produced at the new plant and what the current & future benefits are.
Q1: First off, congratulations on starting production at the new plant, located in Poland. David, why did Zotefoams choose this location?
A1: We’re actually in the south-west of Poland in a town called Brzeg which is fantastically located to meet the needs of our customers in continental Europe. It’s a great distribution hub, transports links, the roads are excellent and Poland itself is one of the largest and fastest growing manufacturing areas for our business so we’re delighted to be there.
Q2: The location of the new plant is key to increasing flexibility and responsiveness, how will this be achieved?
A2: Firstly, our Croydon facility which has supplied continental Europe for many years is now effectively full and it’s very difficult for us to manage inventory etc. The new Poland facility brings capacity, flexibility, it brings inventory ability and both of those are going to be key. Also, the proximity to some of the major customers will cut down the times to ship and of course, the carbon footprint.
Q3: So, what specifically will be produced at the Poland plant?
A3: We have a wide product range generally for a variety of industries, however with the Poland facility, our plans are to produce some of our more common industrial-grade of polyolefin foams initially.
We’ve now started production on a one shift basis and as we gain confidence in that plant and demand increases, we’ll increase the product range but initially it’s core polyolefin business for industrial uses mainly.
Q4: Will that take the load of the Croydon facility going forward?
A4: Not specifically, it’s more the growth is planned to happen in Poland, as I said earlier, Croydon is pretty full, we produce our full product range, we produce our high performance foams in Croydon which have been growing very strongly recently and that’s left us needing capacity to support our polyolefin business.
The polyolefin business today is our largest business and continental Europe is the largest part of that so, again, it was the right decision to invest in capacity in Poland for that customer base.
Q5: Finally, can you just talk us through the current and the future benefits of the plant to Zotefoams?
A5: The current benefits I think are obvious, it’s the increased capacity, responsiveness, customer service improvement that we can gain in the polyolefin business. We’re also putting a T-FIT manufacturing facility in that plant to supply the growing need for high performance insultation in cleanrooms.
The footprint of the factory has been designed to accommodate future expansion, the first stage is a £23 million investment but should we need to invest further that can be done very cost effectively on that facility.