ANAHEIM, CALIF. (Feb. 15, 2:30 p.m. ET) — Precision molder and contract manufacturer GW Plastics Inc. expects to complete an expansion of its liquid silicone rubber capabilities in Royalton, Vt., by the end of the second quarter, and the company is making progress toward completing its plant in Costa Rica.
The Costa Rica plant will be a greenfield facility, rather than the retrofit of an existing plant.
“We will be adding another 12-14 machines in Vermont for our liquid silicones business” — which is almost double what the company expected to add in the initial stages when it first announced the expansion of its silicones division in September, said Tim Reis, vice president of business development for health care.
“The expansion will cost slightly north of $3 million. It is going to increase our LSR capacity dramatically. It dovetails well with our healthcare business,” he said in an interview at the Medical Design & Manufacturing West show, held Feb. 14-16 in Anaheim.
GW, which formed its silicones division in 2008, currently is running four machines for that business. The 16,000 square foot expansion includes an ISO Class 8 clean room for molding and assembly. The expansion can be scaled to 25,000 square feet and up to 18 machines.
“We started the silicones division in one-half of our tech center. It has been very successful and we stuffed that area with machines. We needed to expand,” Reis said.
“The industry is looking for high-end liquid silicone molding with automated de-molding, flashless molding and scientific injection molding for process molding,” he said. “They want someone who can solve technical problems with technical solutions.”
As for Costa Rica, Reis said that the company’s 33,000 square foot plant in that country — first announced in June — will be ready “by the last quarter of this year.”
“Originally we were going to lease an existing facility. But we decided to build a facility because at the end of the day, an injection molding plant requires a specific type of footprint,” he said.
The decision to build a new plant changed the cost of the investment from $3 million to somewhere between $3 million and $5 million.
The plant is a joint venture between GW — which is the majority partner — and Corprosemm Corp., a Cartago injection molder and contract manufacturer for the medical industry.
The JV, GW Plastics Cartago, has been operating in a 10,000 square foot since last summer, and GW has been shipping product to Costa Rica for 5-6 years.
“This will give us a second low-cost place to build medical devices,” Reis said. “Costa Rica continues to attract healthcare OEMs, so it is an attractive place to be.”
He said the plant will have space for roughly 20 injection molding machines, ranging in size from 35-300 tons.
“We see Costa Rica as a continued growth opportunity, so it made sense to invest well,” he said. “We are going to have significant room for contract manufacturing there and we are also going to leave some space for silicone rubber molding and transition to that based on demand by customers.”
GW — the Plastics News Processor of the Year in 2009 — also has plants in the Vermont towns of Bethel and Royalton, San Antonio, Texas; Queretaro, Mexico; and Dongguan, China. Worldwide, it operates six Class 8 clean rooms.
“We have a strong backlog of projects that will impact us positively in 2012,” said Reis. He said the company grew in the mid-teens in 2011, with health care “growing faster” than that. Healthcare now represents 65 percent of the company’s sales, Reis said. “We expect another good growth year.”
“The biggest challenge we are facing right now and that the industry is facing right now is the cost of molding machines and the cost of new technology,” said Reis. “The question we all have to answer is how do you fund replacement equipment, state-of-the-art machine tools. We are fortunate because our ownership is strong and financially stable.”