SPARTA — Buoyed by a $20 million investment, Tesa Tape Inc. aims to transform one if its West Michigan facilities into the North American hub for adhesive tape production and development.
The company, which maintains its corporate headquarters in Charlotte, N.C., recently broke ground on a 24,000-square-foot expansion project in Sparta that executives say will bolster its product portfolio and research and design capabilities.
“We not only have manufacturing here, but also R&D on site,” said Kai Filbrandt, plant manager at the Sparta facility. “That makes it better to support our customers because we have people locally here that can respond quickly to any questions or demands. We can also design tapes for the local markets so not everything has to come out of headquarters, and we can react faster to local requirements and demands.”
Tesa Tape, which is a subsidiary of Hamburg, Germany-based Beiersdorf AG, primarily serves customers in the automotive, consumer electronics, publishing and building materials industries.
With the expansion, the company plans to “significantly” increase production of tapes used to mount and protect vehicle wiring harnesses for the automotive industry, Filbrandt said.
As automakers look to shed weight from vehicles to improve efficiency, more companies are turning to tape, instead of plastic tubes that weigh more, to wrap wiring harnesses, Filbrandt said. Tapes also protect wires from abrasion and other damage better than plastic, he added.
“Automotive is a big market for us, and the reason we’re expanding here is that we want to serve that local market better,” Filbrandt said.
The expansion comes as part of a larger regional push by Tesa Tape to service markets outside of its European core. Tesa Tape also sells products to customers in Asia.
North America accounts for roughly 15 percent of sales for Tesa’s parent company, which generated overall sales of 1.14 billion euros last year, Filbrandt said. The company employs 70 workers at its 90,000-square-foot facility in Sparta and plans to hire 15 new workers as a result of the expansion. Tesa Tape also operates a warehouse and distribution facility in Walker.
In addition to wiring harnesses, Tesa Tape also plans to integrate manufacturing capabilities that will allow the company to transition fully to producing water-based adhesives, which are more environmentally friendly than harsher adhesives made with organic solvents.
Largely, the push to water-based adhesives has come from automakers and customers who want to avoid a chemical smell in new vehicles. However, the new adhesives also make the production process simpler for Tesa Tape, Filbrandt said.
“Automakers are demanding volatile organic compound-free tapes so there’s no solvent smell in the car,” Filbrandt said. “Our internal view is that it’s better for us, too, because it’s better for the environment and it makes it easier because we don’t have to worry so much about organic solvents.”
Filbrandt hopes the push to water-based adhesives, combined with the extra space from the expansion, will give the company’s local research and design team resources to break into new regional markets.
“We’d like to do more than (produce wiring harnesses) and use these water-based adhesive to design and create new tapes that can serve other markets,” he said. “It’s not a purely automotive investment, but also a strategic investment to give us better opportunities and capabilities here to serve the regional markets.”
ENGAGING NEW OPPORTUNITIES
Looking ahead, Filbrandt sees a growing market for high-tech tapes used in consumer electronics.
Mobile device manufacturers are beginning to experiment with flexible organic LEDs, which would allow for thinner and bendable smartphones and tablets. While that technology may seem light years away from tape, it could provide additional opportunities to mount internal components in the devices, Filbrandt said.
Despite Filbrandt’s optimism, the adhesive tape industry in the U.S. has struggled through a period of stagnation and consolidation in recent years, according to a report from IBISWorld, a California-based research firm.
Revenues for U.S. tape manufacturers fell 3 percent to $6.3 billion from 2010 to 2015, according to the report. However, the industry is expected to recover slightly, growing at an annualized rate of 1 percent from 2016 to 2020.
For its part, Tesa Tape has seen some decline in the publishing side of its business as more media outlets choose digital publications over print. The company sells tapes to publishing companies that are used to mount print plates on cylinders and splice paper rolls together.
However, Filbrandt remains optimistic about the potential opportunities for tapes as more companies integrate those products into their manufacturing processes.
“It’s really amazing what is actually mounted with tapes nowadays,” Filbrandt said. “As a normal consumer, you don’t really think about it.”
Made In Michigan: Charlotte, N.C.-based Tesa Tape Inc. plans to invest $20 million in a 24,000-square-foot expansion project at its adhesive tape production facility in Sparta that will make the location its hub for the North American market. The manufacturer will increase the production of tapes used to secure and protect wire harnesses for the automotive industry and transition to using only water-based adhesives as a result of the expansion. Tesa Tape’s expansion is part of a larger strategy to strengthen its regional businesses outside of Europe.