Injection molder Tech Group Inc. has purchased a controlling interest in a Singapore mold maker, Omni Mold Ltd., which had been a partner with the Scottsdale, Ariz.-based firm in other Asian joint ventures.
The purchase gives Tech its first mold-building capability outside North America and lets the company dramatically shorten lead times and better serve multi-national customers, said Jeff Goble, vice president and general manager of Tech's Customer Engineering Center.
Tech didn't disclose the terms in a Sept. 9 announcement. However, Omni's filings with the Singapore Stock Exchange's Internet site said Tech bought 19.49 percent of Omni in April for S$3.45 million (US$2.17 million), making it the largest single shareholder.
Tech Chairman Steven Uhlmann also was named chairman of Omni Mold, replacing Chen Wu-Chang, who became vice chairman and owns about 17 percent of Omni.
Omni specializes in high-precision mold making for health care, computers and electronics, unlike many Asian mold makers that work on large-part molds, Goble said.
``It's not your typical Asian kind of a mold shop,'' Goble said. ``I'm not saying Asian mold shops are low-quality. I'm saying that their molds are different.''
Omni has 116 employees in a 45,000-square-foot shop, and had sales of about S$11.5 million (US$7.74 million) in 1997. The company lost S$1.9 million (US$1.28 million) that year, but showed a small profit of $54,000 (almost US$34,000) in the first six months of 1998, according to Omni documents.
Goble said processors in other countries are starting to take advantage of the weakness in local currency and are boosting mold making in Asia.
``The weakness of their currency has made tooling more attractive in the Far East, and Omni has seen an improvement in business and volume as a result of that,'' Goble said.
Asia's economic downturn has made buying companies there much better bargains, but he said that did not drive the purchase. More important was the ability to shorten lead times, because Omni and other Asian mold shops work multiple shifts, Goble said. A typical lead time for Omni might be eight weeks, compared with 12-16 weeks for the same piece in North America, he said.
Omni and Tech previously had formed a joint venture molding operation in Singapore. Tech bought out Omni's share of that venture in January 1997.
Tech also is finishing renovations to a 60,000-square-foot engineering and product development center in Scottsdale.