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Phillips-Medisize buying Adval Tech plants in China and Mexico

By: Gayle S. Putrich

July 25, 2013

After a more than year-long search for a partner in Asia, contract manufacturer and injection molder Phillips-Medisize Corp. has announced the acquisition of two manufacturing operations from Adval Tech Group, one in Suzhou, China, and the other in Queretaro, Mexico.

The deal, expected to close out after final regulatory approval, includes the Adval Tech Medical Co. Ltd. in Suzhou in eastern China and Omni Manufacturing Services SA de CV in Queretaro, northwest of Mexico City. The price of the acquisition is not expected to be disclosed, though Philips-Medisize said more information on the deal will be released upon closing.

In a news release, Niederwangen, Switzerland-based Adval Tech Group is said the sale was in line with its company strategy to concentrate on mold making and called Philips-Medisize “the perfect buyer” for its medical injection molding operations.

The Suzhou medical technology facility is both ISO 9001 and 13485 compliant and SFDA certified to manufacture finished drug delivery systems and related devices, according to a Phillips-Medisize news release. The Queretaro facility, which is also an injection molding facility for automotive and consumer goods, is both ISO 9001 and 13485 compliant and FDA registered to manufacture components and subassemblies and drug delivery systems and other related medical devices. Phillips-Medisize plans to retain all 350 employees from both operations and intends to begin servicing its global customer base from these locations as soon as possible.

The privately held Hudson, Wis., company also plans to add three Swiss engineers to facilitate its expanding drug delivery development engineering capabilities.

“We are very pleased to welcome the China and Mexico employees to the Phillips-Medisize team,” said Phillips-Medisize President and CEO Matt Jennings, in the release.

“Because these facilities are state-of-the-art manufacturing sites to Switzerland standards, in China and Mexico, we expect these operations will integrate rapidly and seamlessly into Phillips-Medisize and be available immediately to support our global customers,” he said.

The acquisition comes after an exhaustive search for an Asian partner that began in early 2012 amid other major expansion efforts around the world for Phillips-Medisize.

Jennings said in February that he and CTO Bill Welch had visited between 30 and 40 potential partners in China in search of a company that could meet Phillips-Medisize’s technical needs and would mesh well with its corporate culture.

The company is also expanding its Kontiolahti, Finland, to support new contract wins and increasing customer demand with a 60,000 square foot addition that includes 12,000 square feet of new clean room space as well as additional warehouse capacity, new production support space and more materials and technical space.

A 25,000 square foot expansion at its Menomonie, Wis., campus to accommodate cold chain storage and handling for biosimilar drugs that require refrigeration and temperature control was completed earlier this year. In 2012, the company increased the size of its Czech Republic manufacturing plant by more than one-third, adding new clean room space and additional capability to assemble single-use medical devices, drug delivery devices and respiratory products and opened a massive new design and development center in Mountain View, Calif.

About 75 percent of Phillips-Medisize’s sales come from the medical market. With the global healthcare market continuing to grow by nearly exponential rates — aided by an aging Baby Boomer generation in the U.S. and Europe, and a burgeoning middle class in developing countries like Brazil, India and China — the market is expected to continue to grow.

“We see substantial opportunities to grow in Asia,” Jennings told Plastics News in March 2012, at the beginning of the company’s search for a partner in China and about a year after becoming CEO. “Our interest in being there is to stay close to our customers, and they have a desire to be there.”