By: Frank Esposito
December 13, 2013
After bringing work back from China, medical tubing extruder Precision Extrusion Inc. needs more space at its facility in Glens Falls, N.Y.
The firm had operated a plant in Hangzhou, China, since 2011, but higher labor costs and a large commitment of time and resources led Precision to close the plant, President Michael Badera said in a Dec. 13 phone interview.
“Five years ago, a pretty picture was painted in China,” he said. “But our labor costs have doubled and the government incentives that we expected changed over time.
“There are a lot of smart, hard-working people there, but our knowledge is very specific, so we had to spend a lot of time at the plant,” added Badera, who founded the firm in 1993. “It’s not something you can learn in school.”
Startup costs and expenses at the 58,000-square-foot Chinese plant also were three to four times higher than originally anticipated, he said. So Precision Extrusion joins a growing list of North American firms that say they are re-shoring work from China for a variety of reasons, ranging from labor costs to quality control.
Precision now is turning its focus to adding 7,000 square feet to its 15,000-square-foot site in Glens Falls. Of that 7,000 square feet, 5,000 will be used for clean room work. The firm hopes to break ground in spring 2014 on the project, which represents an investment of more than $1 million.
Precision now employs about 30, but plans to add at least 20 to that number in the next few years.
Tubing made by Precision is used in a variety of medical devices. The firm’s products are based on nylon, thermoplastic polyurethane, polycarbonate and other resins.
Privately held Precision does not disclose its annual sales totals, but Badera said sales growth is in “the high teens” for 2013. That same growth rate could be matched in 2014, he said, due in part to the firm doing more post-extrusion work.
As for the Chinese plant, Precision is debating whether to restart the plant in a year or two or to move equipment from the plant back to Glens Falls. The firm will continue to export products made in the United States to the Asian market.
“There are still opportunities [in China],” Badera said. “But in our case, their level of manufacturing experience wasn’t up to our standards.”