SAN DIEGO — Contract manufacturers are beginning to reshape the global plastics industry, according to a senior official with Flextronics International Ltd.
Paul Santina, vice president of business development and global plastics for the Singapore-based firm, speaks from experience. Flextronics has grown quickly, from sales of $200 million in 1996 to $4.31 billion in the fiscal year ended March 31.
Santina said Jan. 16 from his San Diego office that his firm currently is on a $13 billion-per-year pace.
"We're not going to buy plastics parts from you," he said. "There's a good chance we'll do it all ourselves." He said that approach will be more cost effective.
The contract manufacturer specializes in the electronics, computer and medical fields. Flextronics has built huge, vertically integrated supplier campuses in low-cost areas of the world and also has been on a recent acquisition spree.
Its assets include 675 injection molding presses, nearly 500 mold makers and 17 plastics processing and design facilities worldwide. Santina said Flextronics plans to add facilities in China (its eighth in that country), Brazil, Hungary and the Czech Republic.
The firm also has a plant in New Braunfels, Texas, and is adding a 1.5 million-square-foot facility at its existing 1 million-square-foot supplier campus in Guadalajara, Mexico.
"We've differentiated ourselves by vertically integrating. ... We're more interested in doing strategic [supply] deals with big companies," Santina said. For example, Flextronics is in the first year of a five-year contract calling for it to supply Motorola Inc. with $30 billion in products and services.
"Having a global plastics capacity was important to us," said Santina.
Santina will talk about how contract manufacturing will impact the global plastics industry when he delivers the Plastics Encounter Los Angeles keynote speech April 10. For details, visit www.plasticsencounter.com.