SAN DIEGO (Jan. 18, 3:20 p.m. EST) — 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 firm, is speaking from experience. Flextronics has grown at bullet-train speed, from sales of $200 million in 1996 to $4.31 billion in the fiscal year ended March 31.
Santina, in a Jan. 16 telephone interview from his San Diego office, said 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 suggests 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 has been on a recent acquisition spree.
Its assets today include 675 injection molding presses, with Santina predicting that will rise to about 1,000 in the foreseeable future. The firm employs nearly 500 mold makers, and has 17 plastics processing and design facilities worldwide. Santina said Flextronics plans to add plastics facilities soon in China (its eighth in that country), Brazil, Hungary and the Czech Republic.
The firm also operates a plant in New Braunfels, Texas. It is adding 80 acres and a 1.5 million-square-foot facility in Guadalajara, Mexico, where it already has a 50-acre supplier campus with a 1 million-square-foot facility.
Santina, a former Borg-Warner Chemicals resin salesman, said, "We've differentiated ourselves by vertically integrating. ... We're more interested in doing strategic (supply) deals with big companies."
For example, Flextronics is in the first year of a five-year contract that calls for it to supply Motorola Inc. with products and services worth $30 billion.
"Having a global plastics capacity was important to us," said Santina, who added "global plastics" responsibilities to his title and portfolio about six months ago.
Santina will talk about how contract manufacturing will affect the global plastics industry when he delivers the Plastics Encounter Los Angeles keynote luncheon speech April 10 at the L.A. Convention Center. For details, visit www.plasticsencounter.com online.