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MGS buying N.Y. medical molding plant from Hospira

By: Roger Renstrom

April 17, 2014

MGS Manufacturing Group is purchasing the Buffalo, N.Y., injection molding facility and related product line of Hospira Inc., effective July 1. Terms were not disclosed.

Members of the Hospira and MGS management teams announced the pending transaction to the facility’s employees April 14 and to the public on April 17.

The Hospira-owned plant employs 120, operates 40 injection molding machines with clamping forces of 100-400 tons and manufactures parts for Hospira’s pharmaceutical and device businesses.

Hospira employees at the Buffalo facility will join MGS. No layoffs are planned as part of the purchase.

Paul Manley, MGS chief operating officer and chief financial officer, said the deal represents a strategic move for both companies.

In a statement, Matthew Stober, Hospira senior vice president of operations, said, “MGS meets or exceeds the ISO and FDA guidelines for single-use disposable plastics manufacturing and will ensure supply continuity is maintained at all Hospira facilities.”

Germantown, Wis.-based MGS has extensive experience the molding of parts and designing, building and sampling molds for the medical device and drug delivery industries.

MGS said the components that the Buffalo facility produces fit squarely within its list of capabilities.

Buffalo will become the sixth molding facility for MGS. Others are located in Germantown; Libertyville and Antioch, Ill.; Chihuahua, Mexico; and Leixlip, Ireland.

Among MGS operations, a Guangdong, China, site provides engineering, design, project management and Universal-Multishot-System equipment sales and service. Specialty UMS equipment allows a molder to use standard injection molding presses as multi-shot machines.

Medical production accounted for 24.5 percent of 2013 sales of $165 million. Other major MGS markets were electronics at 18 percent and automotive at 17.5 percent.

Molding accounted for 68 percent of 2013 sales, tooling for 23 percent and equipment for 9 percent.

MGS began operations in 1982, occupies about 586,000 square feet, operates more than 215 presses and employs more than 1,200 including in excess of 100 toolmakers, designers and technicians; 70 quality personnel; and 25 program managers and project engineers.

Publicly traded Hospira of Lake Forest, Ill., employs about 17,000 and develops, manufactures, distributes and markets specialty generic and proprietary injectable pharmaceutical drugs and infusion technologies.

Hospira reported a loss of $8.3 million on 2013 sales of $4.00 billion versus a profit of $44.2 million on 2012 sales of $4.09 billion.

The 2013 loss included pretax charges of $226.9 million for allowances, customer accommodations and inventory charges for initial implementation of a device-strategy initiative to streamline and modernize Hospira’s product portfolio.

For 2013, markets in the Americas accounted for 79.6 percent of Hospira sales, Europe-Middle East-Africa for 12.7 percent and Asia-Pacific for 8.0 percent. Hospitals and wholesalers are Hospira’s primary customers.

In addition to the Buffalo site, Hospira has manufacturing capabilities in 13 other facilities in the U.S., Australia, Ireland, India, Costa Rica, Italy, Dominican Republic and Croatia.