Standing pat is not an option for Sirmax SpA.
The Cittadella, Italy-based plastics compounder and recycler, which has already spent €180 million ($196 million) in recent years to expand operations around the world, expects to spend another €30 million ($32 million) with an eye toward growth in both the United States and India.
CEO Massimo Pavin was just settling in at the Sirmax booth on the first day of the Fakuma trade show in Friedrichshafen, Germany, shortly after the doors swung open when he talked about the trends driving his company's growth plans.
"First of all, I think that our business, our sector, is a sector where the number of the players is decreasing and the size of the players is increasing. I mean, there are a lot of movements about merger and acquisition," he said.
"The playground is the same, but the players are bigger and bigger. So, I don't think that in the present, the future, there will be enough room for the small companies. So, the best answer is that growth is mandatory," Pavin added.
Sirmax already has existing operations in the U.S. and India, but it sees the need for more growth to better serve each market. In the U.S., that means continuing to expand the company's manufacturing compound in Anderson, Ind., that currently handles polypropylene compounding and recycling.
While plans are still being formulated — Sirmax expects to firm up decisions in 2025 — Pavin talked about bringing additional resin capabilities there to more closely match what the company already offers in Europe. That could include the inclusion of engineered resins.
"We are quite strong in Europe, where we have six plants and where we are present since 60 years. And we definitely want to develop the new markets and the U.S. for us. I mean, North America is the most important, the most promising," Pavin said.
Not only is the company looking to introduce engineered plastics to the Anderson location but also Sirmax has room to further expand the polyolefins business.
"The idea is to have in North America the entire range of products that we have in Europe. That means continuous investments there," Pavin said. "We are exporting now from Europe to U.S. Once the volume could be quite significant, we can move the production there."
In India, where it already has two facilities, the company is eyeing a third site in the southern part, in Hosur, Tamil Nadu. That location, planned for 2026, will complement existing company locations in the east at Valsad, Gujarat, near Mumbai, and in the north at Palwal, Haryana, near New Delhi.
Sirmax is keen on spending money to expand in the U.S. thanks to the growth it is experiencing in that market, about 20 percent in 2023, the CEO said.
Sirmax has been around for six decades, but it has only gotten into recycling in the past five years. As a privately held company by Pavin and his brothers, the company has had the flexibility to roll profits back into expanding recycling in a big way, he explained. The company also has used debt to help fund production growth, but the CEO said his firm carefully weighs the amount of debt it takes on when determining how to fund new projects.
"It is another advantage of the private-owned company that can really decide in which way to use the money that comes from the net profit. And then more often I sit down around the table with my brothers and say this year I want to leave the money in the company because we need to grow up. Some other years we can have some dividends," Pavin said. "We are ready. We are flexible."
While the company is more definitive about plans to expand in both the U.S. and India, there are also aspirations to eventually create production in Mexico, he said.
Pavin recently was in the U.S. to attend a conference, and he said he found that the country is further ahead in sustainability than people there realize.
At Fakuma, along with talking about growth plans, Sirmax is highlighting compounds targeted to the automotive industry as well as formulations for the electrical and appliance sector made from post-consumer plastics, the company said.