A division of Palo Alto Products International (Pte.) Ltd. in late January plans to break ground for a 50,000-square-foot injection molding facility in New Braunfels, Texas.
The plant will allow the firm to bring work onshore from Asia. Now, a separate division in Taiwan makes the company's components for personal computer enclosures or chassis for housing mechanical parts.
The project is driven by cost sensitivity within the computer industry and the trend toward acquisitions and closer operations of plastic and metal suppliers.
Palo Alto Products purchased 12 acres in December, is completing the plant's design and expects to begin molding operations in June, said Chris Morton, the Texas operation's general manager. Most recently, he held a managerial position with Nypro Inc.'s Gurnee, Ill., operation.
The Texas site will start with 50-70 employees and 15 presses with clamping forces of 100-750 tons—most of them at the high end of the range, Morton said. The plant can be expanded to 200,000 square feet.
The Palo Alto, Calif., firm, which focuses on proprietary concepts, was formed when Palo Alto Design Group and Taiwanese manufacturer A-tch Co. Ltd. merged in December 1996. It has grown into a vertically integrated maker and assembler of computer chassis for original equipment manufacturers such as Dell Computer Corp., Micron Technologies Inc. and Motorola Inc., said John Toor, vice president of research and development.
Currently, the firm's Palo Alto Manufacturing Group division makes molds and forms the plastic parts in Taipei, Taiwan. The Palo Alto Design division acquires metal components from the New Braunfels plant of Lightning Metal Specialties Inc., about three miles from the new plant site.
Customers want one-stop shopping for plastic and metal assemblies, and the designs of Palo Alto Products go one step further, Toor said.
``We are doing our own products and getting costs down,'' Toor said in a telephone interview. ``We don't mind doing contract work, but we prefer to have proprietary interests.''
Currently, the firm has more than six proprietary product models and maximizes assembly opportunities, Morton said.
Palo Alto Products has created computer chassis that are essentially plastic with metal shielding, Toor said. The firm mainly uses PVC, and some ABS. Previously, OEMs favored the use of metal with a plastic-front bezel.
``We have a lot of the responsibility for changing'' that industry practice, he said.
Speed to market is essential. The firm designed the PalmPilot business organizer for 3Com Corp.'s palm computing division in Mountain View, Calif., and ``built all parts for the first six months'' in early 1997, according to Toor.
Palo Alto Products employs 35 in Palo Alto and another 110 plus several hundred contract workers in Taiwan. It generated sales of about $88 million for the fiscal year ended in March.