MGS SPENDING $40 MILLION FOR EXPANSION

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GERMANTOWN, WIS. — MGS Enterprises Inc., a Wisconsin-based mold maker, is in the midst of a $40 million expansion that the company says will transform it into one of the largest plastics service firms in North America within a decade.

The project's first phase — the $10 million MGS Technical Center — opened in September at the Germantown Industrial Park northwest of Milwaukee. Three other buildings are planned on the 23-acre industrial site, each costing $10 million in construction and equipment costs. The entire project is scheduled for completion within five years.

The two-story, 66,000-square-foot technical center is the operations hub for a group of independently owned firms under the MGS umbrella. Company co-founder and chief executive Mark G. Sellers serves as majority shareholder of each privately held company. Employees are encouraged to purchase stock options.

MGS is organized into eight companies, including production-mold manufacturer Moldmakers Inc.; mold and product designer O&S Design Inc.; rapid prototyping house Prototype Mold & Design Inc.; finishing and polishing area Redline Inc.; and Statistical Plastics Corp., which samples and qualifies injection molds prior to shipment.

Moldmakers is based at corporate headquarters in Menomonee Falls, Wis.

The rollout is expected to continue in September 1997, when MGS plans to open another 72,000-square-foot building adjacent to the center and containing specialized manufacturing and tooling.

The company, which started 15 years ago in Butler, Wis., with four people, now has 261 employees, with 150 of those workers at the technical center. Sellers said the company would like to boost total employment to about 500 within 18 months.

``Eventually, we want to be the largest engineering house for plastic manufactured parts in the world,'' Sellers said. ``You can only do that by not being afraid of growth.''

For the past several years, MGS' sales have grown at least 30 percent per year, Sellers said. MGS recorded sales of $35 million during 1996 for its combined companies, and Sellers said he expects sales of close to $50 million in 1997.

The mold-making industry in general is expected to grow at a rate of 5-6 percent in 1997, according to an industry study conducted by D-M-E Co., a supplier of mold bases and components based in Madison Heights, Mich.

Sixty percent of MGS' sales this year will come from tooling, with the rest split between design and manufacturing.

The company specializes in high-end, post-tolerance parts primarily for telecommunications, electronics, computer, medical and specialized automotive applications. Among its molds are those for cellular phones, circuit breaker switches, syringes and vehicle instrument panels. The mold maker has expanded beyond North America to serve customers in Germany, China, Mexico and other countries.

Sellers credits advanced computer software with helping to create the company's compact, highly detailed molds. The company practices rapid tooling by creating molds from its computerized, three-dimensional, solids-modeling programs using Pro/Engineer and other computer-aided design and engineering programs.

MGS, which does no hand modeling, produces finished and tested molds in as little as four weeks, Sellers said.

``Delivery is the key to our business,'' Sellers said. ``Our software and processes decrease time to market, while allowing us to design molds with aspects identical to [products] used in real life.''

Machinery at the technical center includes 21 computer numerically controlled electric discharge machines; 41 CNC milling machines capable of producing molds of 500 tons and less; and 11 injection molding sampling machines with clamping forces of 90-500 tons.

The company has not decided what equipment will be installed at the second building when it opens in September.