Leading Equipment Manufacturers Form Alliance to Serve as Single Source of Complete Auxiliary Systems for Processors


New Auxiliary Systems Group Draws on Focused Expertise of advantage and novatec as Alternative to Auxiliary-Equipment 'Department Stores'

SAN DIEGO, February 26, 2007: NOVATEC, Inc. and ADVANTAGE Engineering, Inc. have signed an agreement to form the Auxiliary Systems Group (ASG), an alliance for the engineering and development of complete integrated plastics auxiliary equipment systems, it was announced today during the Plastics News Executive Forum. Processors will benefit, according to alliance officials, because the Auxiliary Systems Group combines the advantages of "single-sourcing" with the depth of technology and breadth of product selection available only from specialized suppliers such as NOVATEC and ADVANTAGE.

NOVATEC, a focused manufacturer of resin handling equipment, offers the industry's broadest range of dryers and loading control systems and is also the largest North American distributor of Maguire blenders; ADVANTAGE is the leading producer of heat transfer and temperature control components and systems. While the companies will still operate independently, the Auxiliary Systems Group will operate as a single engineering and customizing team, serving processors that require complete project management, from designing systems to installing equipment. This will include types of auxiliaries not produced by the two founding companies; specialized suppliers of these other equipment types, such as robots and granulators, are expected to join the ASG as participating members, though NOVATEC and ADVANTAGE will remain the sole official partners in the alliance.

"Customers of the Auxiliary Systems Group will enjoy the economic and logistical advantages of having all of their engineering, controls-customization, and installation needs managed by a single project team representing a true working alliance," said Conrad M. Bessemer, president and CEO of NOVATEC. "We've designed the ASG to be a seamless interface with customers, providing them with comprehensive and coordinated service from initial quote to equipment startup to technical support after the sale. No longer must processors compromise in single-sourcing their new in-plant systems by relying on suppliers that cannot possibly be experts in everything they distribute."

The resin-handling and heat-transfer equipment manufactured by the founding members of the ASG are the critical infrastructure of any plastics processing plant and account for roughly 70% of the total auxiliaries investment for most operations, according to ADVANTAGE president and CEO Harry Short. "ADVANTAGE and NOVATEC provide more than sufficient critical mass to make the Auxiliary Systems Group a leader as a full-service, single source for systems integration," Short said. "Every year, both companies consistently sell more of the products in which they specialize than auxiliary equipment 'department stores' like Conair and AEC, while at the same time offering, by far, the broadest selection of alternatives within each of their product specialties."

ASG Is Organized to Serve as a Comprehensive Single Source of Auxiliary Systems

Short and Bessemer cited these features of the Auxiliary Systems Group as keys to providing customers with a seamless supplier interface and logistically streamlined service:

o Advanced project management team. NOVATEC has extensive experience in the engineering of complete resin handling systems for processors and maintains project engineering offices at its Baltimore headquarters and a new facility in Michigan. Heading the project management group for ASG will be Jim Zinski, vice president of applied projects at NOVATEC. Doug Arndt will manage the Michigan project office in his capacity as NOVATEC regional vice president. Bill Jones, former vice president for heat transfer development at Conair, has joined the ASG to coordinate systems and infrastructure-development projects between the two founding companies. Finally, the ASG has a staff of trained resin-handling and heat-transfer systems engineers at regional offices throughout North America, according to Bessemer. "We have more true regional experts in place, ready to help customers, than any of the 'department store' competitors," he said.

o Comprehensive network of agents representing the alliance throughout the United States. ADVANTAGE and NOVATEC already share representatives in nearly all North American sales territories, and other representatives will be added soon as part of the expansion of this sales network.

o Integrated control programs. The ASG will incorporate a common communication platform into ADVANTAGE's heat transfer systems and NOVATEC's resin handling systems. An associate alliance company, Advantage Electronics, will be dedicated to embedded controls, and these will become the standards for appropriate ASG products. NOVATEC will focus on customization and development of PLC systems for products from both companies. Just as NOVATEC recently opened a Drying Technology Center at its headquarters in Baltimore, by the end of next month it expects to open there a new Controls Technology Center, devoted solely to the development and customization of in-plant PLC systems for infrastructure projects.

o Single interface with customers. "The ASG project management group and sales network will provide a single quotation, single responsibility, single installation, and single purchase order coordination for all joint resin-handling and heat-transfer infrastructure projects," said Bessemer. The ASG will maintain its own website and can be contacted separately from the founding companies (1-866-252-6370 or info@auxsystemsgroup.com).

o Centralized sales database. ADVANTAGE and NOVATEC will develop a communication system for ASG to permit sharing of customer information, order histories, sales statistics, and other data necessary for interacting seamlessly with the marketplace.

Systems Engineered by Focused Manufacturers Seen as Key to Processor Competitiveness

The ASG provides plastics processors with the advantages of single-sourcing plus access to the expertise of specialized manufacturers, according to Bessemer.

"The future of the plastics industry in North America is modernization, which is necessary to increase productivity, reduce maintenance, and lower energy costs," said Bessemer. "The surest way to achieve this is to avoid the compromises of dealing with conventional single-source vendors by installing best-in-class equipment from specialists like ADVANTAGE and NOVATEC."

The advantages of differentiation and specialization were also cited by Short: "The power to focus on specific products is huge in the plastics industry," he said. "In the past thirty years, the majority of product innovations and productivity improvements have been pioneered by focused manufacturers. The emergence of an alliance like the ASG as an alternative to 'department store' suppliers is the logical next step, paving the way for productivity gains that are not available from these generalist, commodity companies."

AUXILIARY SYSTEMS GROUP (ASG) provides project management services for the engineering, procurement, installation, and technical support of auxiliary equipment systems for plastics processors. Operating as a strategic working alliance, ASG was founded by ADVANTAGE Engineering, Inc., a specialist in heat transfer and temperature control systems, and NOVATEC, Inc., which focuses on resin handling systems. These companies are the sole partners in the alliance, but companies specializing in other types of auxiliary equipment may become participating members. ASG is represented by manufacturing representatives throughout the United States. Telephone: 1-866-252-6370. Email: info@auxsystemsgroup.com. Visit the ASG website at www.auxsystemsgroup.com

Robert J. Martino,

Martino Communications Inc.,

8 Main Street / P.O. Box 379,

Hastings-on-Hudson, NY 10706 USA,

Tel: 1-914-478-0754,

Fax: 1-914-478-0959,

bob@martinocommunications.com

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