Evco to build $4 million factory for medical, precision molding

By Steve Toloken
Staff Reporter / Asia Bureau Chief

Published: March 21, 2014 1:00 pm ET
Updated: March 21, 2014 1:04 pm ET

Image By: Steve Toloken Evco President Dale Evans at the company's Shenzhen facility.

Related to this story

Topics Medical, Injection Molding, China

SHENZHEN, CHINA — Injection molder Evco Plastics plans to invest at least $4 million in a new facility in China, which the company says will help it better target opportunities for medical and precision part manufacturing and handle the rising costs along with reshoring challenges hitting China’s export sector.

China was the site of Evco’s first non-U.S. factory, but the DeForest, Wis.-based company’s newer operations in Mexico have grown much faster in recent years, President Dale Evans said in a March 18 interview at the company’s Shenzhen facility.

Evco has nine factories and 900 employees in the United States, Mexico and China. Evans, a longtime internationalist in the plastics processing industry, offered insight into how a mid-sized plastic processor is dealing with changing global supply chains.

The company initially built the molding plant in China for the kind of large-part work it does in the United States, like covers for outboard marine motors.

But then some of that manufacturing moved to Mexico, and China shifted focus to mid-volume assembly and smaller parts that can be shipped cost-effectively, he said.

“The business that we’re getting [in China] is the little things, the complex parts, so we need to size the facility and the clean rooms for that type of thing,” Evans said. “I want to build a multi-floor

facility. ... You can have the whole floor be a clean room. You can drop parts through the floor. You can bring resin up.”

The company hopes to have the new facility operating within two years, and plans to keep it near the existing plant, which will shut down.

Evco set up a mold making joint venture in Shenzhen in 1989 with a Chinese defense contractor, and opened its own wholly-owned injection molding facility in Shenzhen in 2004.

But in recent years, Evans said, Mexico has outpaced China. Evco opened its first plant in Monterrey, Mexico, in 2001, and added two more in 2005 and 2007.

Today, its three Mexican plants have 50 injection machines, compared with 16 in China, and more employees. Globally, Evco has more than 140 molding machines.

“Yes, [Mexico] is growing much faster,” he said. “There is reshoring going on. When people talk about reshoring, they talk about North America, not necessarily the U.S.”

But he said the China operation remains competitive. The Shenzhen facility and its 100 employees went eight years without a rejected part, which Evans said was longer than its U.S. operations.

Showing a visitor around the 73,000-square-foot factory, he pointed out a small Class 100,000 clean room. The new installation is a sign of what’s coming for China.

Inside the dust-free environment, two staff in surgical garb used an all-electric press to mold parts for a stent and then machined tiny holes into them for future assembly. It’s Evco’s first clean room in China.

The Shenzhen plant is working toward getting ISO 13485 certification for medical manufacturing — something that Evco’s U.S. operations have.

Shenzhen also recently added its first robot and has another on order, which Evans said reflects the reality of rising factory wages and the need to automate. Worldwide, the company has 104 robots.

“China has a place, our target markets are complex small assemblies,” he said. “If we do that in the U.S., we automate the heck out of it. We have cells that have four robots and a molding machine. Nobody ever touches the product.

“You have to have a certain amount of volume to do that,” he said. “The sweet spot in China is below that volume, where you cannot afford to spend the money on the automation but yet you still need to put the assembly together.”

He said the company will invest at least $4 million in the new building in China, plus additional money for unspecified equipment. It has only two electric molding machines in Shenzhen, out of 16 presses there, but Evans suggested more could be coming as the factory retools.

The company made the wrong decision in Shenzhen opening a plant with high ceilings designed for large part molding, he said, adding with some Midwestern candor: “It’s pretty much because of a mistake I made.”

In the United States, those bigger parts are one of Evco’s major markets. It’s been adding very large presses in recent years, including a 3,500-ton press last year at its factory in Oshkosh, Wis., for parts like vehicle hoods, instrument panels and parts for agricultural equipment.

The Shenzhen factory — which sits in the city’s Longhua neighborhood immediately next to a factory of contract manufacturing giant Foxconn that attracted notoriety for installing suicide nets around its worker dorms — remains overwhelmingly focused on exports.

About half Evco’s Shenzhen products are directly exported, and much of the other half is sent to customers’ factories elsewhere in China where it will ultimately be shipped outside the country, the company said.

Evans was cautious about the potential of China’s domestic market for Evco, in spite of a lot of talk in industry circles about that.

While there’s potential with some of its global medical device customers, he blames what he said is a “selective” enforcement of laws in China that put companies that follow regulations at a “distinct disadvantage” on cost.

Not that the company needs a shot in the arm from China’s domestic market at the moment.

Globally, Evans said the privately owned firm’s sales have grown from about $110 million in 2007 before the Great Recession — when it saw sales drop 40 percent in 2008 and 2009 forcing it to close one factory — to more than $130 million a year now.

Before 2007, he said the company’s sales pretty closely tracked U.S. industrial production. But since then, its growth worldwide has been “significantly above those numbers,” Evans said.

It’s having a record year for mold making, which should indicate good results for its molding and assembly operations in the near future, he said.

“We bet the right horse, with good customers,” Evans said. “We spent a lot of time going after the right customers.  You can do everything right and you have the wrong client, and you’ll fail.”


Evco to build $4 million factory for medical, precision molding

By Steve Toloken
Staff Reporter / Asia Bureau Chief

Published: March 21, 2014 1:00 pm ET
Updated: March 21, 2014 1:04 pm ET

Post Your Comments

Back to story

More stories


Toy supplier sues maker in reshoring fight

September 15, 2014 3:18 pm ET

An Arkansas toy supplier is suing a Taiwan-based manufacturer for breach of contract and other civil allegations in a legal dispute that not only...    More


Material Insights: Commerical production of antibacterial polymers begins

September 15, 2014 1:55 pm ET

PET bottle resin prices rise, we talk shale gas and antibacterial polymers.    More


ZF finalizes deal to buy TRW, creating another global auto supply giant

September 15, 2014 1:09 pm ET

TRW Automotive Holdings, in a supply chain megadeal that has been in the works since mid-July, said Sept. 15 it has agreed to be acquired by German...    More


Sabic, Chinese Academy of Sciences sign five-year development agreement

September 15, 2014 11:54 am ET

Ties between one of the world's biggest oil producers and one of its biggest consumers grew tighter Sept. 12 with the announcement of a five-year...    More


China's Zhongtai Chemical calls off large-scale PVC project

September 12, 2014 2:16 pm ET

Accepting the gloomy reality of the PVC market, Xinjiang Zhongtai Chemical Co. Ltd. has officially canceled a 800,000-ton PVC resin project and instea...    More

Market Reports

Shale Gas Market - Analysis of North American Region

This report highlights the impact of shale-based natural gas on the North American plastics market and features an in-depth analysis of production trends in the United States during 2013 and a forecast for 2014 and beyond.

Learn more

Thermoformed Packaging 2014 Market Review & Outlook North America

This in-depth report analyzes economic and market trends, legislative/regulatory activity impacting supply and demand, business opportunities and threats, materials pricing, manufacturing technology, as well as growth strategies being implemented by thermoformed packaging companies.

Learn more

Pipe, Profile & Tubing Extrusion in North America 2014

U.S. demand for extruded plastics is expected to grow by 3 percent in 2014, with PVC remaining the largest segment.

Plastic pipe will post the strongest gains through 2018, continuing to take market share from competing materials in a range of markets.

Our latest market report provides in-depth analysis of current trends and their financial impact on the pipe, profile and tubing extrusion industry in North America.

Learn more

Upcoming Plastics News Events

January 14, 2015 - January 14, 2015Plastics in Automotive

February 4, 2015 - February 6, 2015Plastics News Executive Forum 2015

More Events