The factory will produce Carrera flowrappers and increase production for its Delta Systems products.
A further 20,000 sq ft of manufacturing capacity is also planned to allow for expansion in line with the group’s growth strategy for the North American market.
Christian Romualdi, marketing manager, Ilapak Group, told FoodProductionDaily.com the investment allows the international group to extend the range of products it manufactures in the US and compliment the range of Delta Systems that are already manufactured in the region.
The firm mainly focuses on the bakery sector, biscuits, cheese, chocolate and confectionery and meat and poultry.
“We need to produce more machines here and it’s important to serve the US market locally from the US. This investment allows us to produce machines from the Ilapak range at this factory. It is important for us to have a ‘made in the US’ label for this market,” he said.
Ilapak acquired Delta Systems and Food Machinery Sales (FMS) under two operating divisions of Ilapak Holding USA in 2008.
Delta Systems specializes in the manufacture of primary product handling, feeding and wrapping systems for various consumer products but most notably for the bakery industry.
Romuldi added, at the time of the acquisition, Ilapak retained all Delta Systems product lines, service, engineering, sales, and support functions operating from its premises in Rogers Arkansas and Athens Georgia.
FMS specializes in distribution and feeding systems for snack food, cookie and cracker manufacturers.
“The acquisition of Delta Systems strengthened Ilapak's position in the North American market and our group capabilities in the biscuit industry and general automation,” he said.
“The factory will serve as our new manufacturing unit and the old one in Rogers Arkansas will be kept for some time with a view to eventually demolish the building.
“We will be hiring staff for the factory once production begins.”
IMA signed an agreement with the shareholder of Transworld Packaging Holding (TWP), a holding company of the Ilapak Group, in February this year, concerning acquisition of a further 30% share of TWP. This saw IMA’s ownership of Ilapak rise to 81%.
The decision to consolidate IMA’s position in the Ilapak Group came after a successful second half of 2013, as well as its business expansion projects in the food sector.
IMA has also reserved the right, in a separate option agreement, to acquire the remaining 19% of TWP stock during the fiscal years of 2017 or 2018.
Romuldi added the facility will be based in Lowell, near to the local airport and highways.
“The temperature-controlled manufacturing area will allow Ilapak’s manufacturing team to test in conditions closer to a customer’s own factory conditions, ensuring equipment is built and tested in an environment that more closely imitates the environment it will operate in which is important for some high speed lines,” he said.
“The facility will also house an R&D team focused on engineering for the North American market, a quick-response service centre and a customer innovation and demonstration area.”
Based in Lugano Switzerland the Ilapak Group has factories in Switzerland, Italy and China and specializes in horizontal and vertical form, fill and seal packaging machinery.