Modern Executive
Nov 1st, 2005                                Print this article

Swiss closure specialist making big move into processing ranks

By Matthew Defosse

Corvaglia, a Swiss firm formed in 1991 as a closure design studio, is already one of the world's leading injection moldmakers for PET bottle closure molds. Now, say officials at the company, the vertical expansion continues.

Other processors in the market will want to pay heed. Since acquiring a small Swiss moldmaker in 1996, the move that added injection moldmaking capacity to Corvaglia, the company has grown to grab about a 20% market share of the entire injection mold market for plastic closures for PET bottles, according to Thomas Anderegg, CEO of Corvaglia's closures business. Now, he says, it is keen to grab a similar share of the market for closures for these bottles.

Reaching the 20% mark may take a while but Corvaglia is taking swift strides. Last year the company acquired a molder in Ixtlahuaca, Mexico, and already molds more than 1 billion closures/yr there, says Anderegg. That operation molds three different closure types: a 28-mm PCO standard for carbonated soft drinks (CSDs), a 48-mm wide-mouth closure for cold beverages and the aseptically filled, and a 30-mm closure for still water. All are molded from high-density polyethylene (HDPE). At the Swiss site it will mold these and other closure types; there is demand in Europe for sport caps and 38-mm closures.

This summer the firm opened its own processing facility in Eschlikon, Switzerland, spending about e10 million on injection molding machinery and related equipment. The firm relies on its captive closure design and moldmaking capacities to fill its presses; in fact, Anderegg says, that is the secret to the firm's rapid rise. "Through our complete integration, we can be technical and cost-price leaders," he says. "Because our history is in closure design, we have the patents and the knowledge in-house." The firm also now relies on about 100 employees; last year it had just 50. "We maintain a very flat corporate structure so decisions can be made quickly," he notes.

For a firm that wanted to be bigger, the vertical expansion was necessary, says Anderegg, due to the limited size of the market for closure molds. "The mold market (for our type of closure molds) is only about e60 million globally per year. Expanding vertically lets us grow and also builds on our strengths. Integration lets us quickly identify market trends and bring new closure designs and molds to market to meet those trends."

Though Switzerland is known as a high-wage country, Anderegg says the firm's highly automated production means the impact of these wages on the company is small. Plus, Switzerland proves a good, central location from which to ship product. He says standard closures can be shipped economically to customers within a 1000-km radius from Corvaglia; more complex closures can be shipped even farther.

Anderegg admits the firm will need additional molding capacity to hit its targeted market share, and predicts this capacity initially will be added in the Americas and Eastern Europe. "In North America, we had no Corvaglia mold running so there is no worry about taking market share from our mold purchasing customers," he notes. Elsewhere the firm has worked to sell molds and closure designs to a single key customer per market, and he thinks relationships could develop between Corvaglia's closure molding operations and its mold purchasing customers.

Matthew Defosse mdefosse@modplas.com

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