An Oregon subsidiary of Seiko Epson Corp. expanded last year beyond proprietary products into contract manufacturing. One capability the company is banking on is its experience using masterbatch color concentrates instead of precolored compounds.
"It's a whole new world of color in electronic devices," said Mike Reinhold, plastics engineering supervisor for Epson Portland Inc. in Hillsboro, Ore.
Apple Computer Inc.'s stylish iMac opened people's eyes to the possibilities of lime, grape and other colors in 1998 and then transitioned to ruby, indigo, sage and more in mid-2000. The changes surprised some processors holding significant quantities of the original pre-colored resins.
Epson avoided that problem.
Epson has worked with the masterbatch division of Clariant International Ltd. in managing the growing demand for color hues and special effects. In 1997, Clariant Masterbatches convinced Epson to use natural resin plus concentrate instead of pre-colored resins, Reinhold said.
The initial goal was cost reduction. Now, the market is driving Epson to the highly concentrated pigment masterbatches for newer colors and the reality of smaller production runs. Reinhold said Epson spends more time on upfront tests to get a formula suitable for manufacturing.
"Electronics manufacturers are leaving money on the table by not using all the advantages of natural plus concentrates," said Jean Sirois, a Clariant Masterbatches vice president and regional general manager in Phoenix.
"It will always be more expensive and lengthy to get resin colored by a resin manufacturer because they have to extrude it twice."
Sirois, who oversees the southwestern United States and Mexico markets, has product line responsibility for electronic business and telecommunications equipment.
Reinhold and Sirois agree that color concentrates permit more experimentation compared with pre-colored resins, which can take four to 16 weeks to produce. A processor using masterbatches can find the best resin for an application rather than adapt to an existing or customized pre-colored resin.
Epson Portland employs 1,000, operates 40 injection molding presses of 15-650 tons and produces 500 million parts per year, historically making computers and computer peripherals including printers. The Epson Portland site opened in 1985 and is ISO 9002 and ISO 14001 certified.
Last year's expansion to contract manufacturing and systems integration services for nonbranded products has brought in a variety of jobs for consumer products, automotive vehicle identification tags, communication devices and hand-held flash memory devices.
Reinhold said Epson runs 30-40 colors, mostly in polypropylene and high-impact polystyrene with some polycarbonate, PC blends and elastomers.
Doing custom color in-house gives Epson an advantage because competitors must use an outside source, said Gerry Snell, Epson director of new business development.
Some Epson customers know exactly what they want, but others have a general concept and need assistance. One customer, for example, wanted to emulate the Epson printer's translucence but hide internal components such as the circuit board.
During 11/2 days, Clariant's design center in Phoenix custom blended samples that Reinhold and the customer considered. Four finalists went to the project team for consideration. "We were in production three days later" with a material balancing see-through and opaque characteristics, Reinhold said.
Clariant began production in Phoenix in 1996 and uses the location as a staging point to reach Silicon Valley and West Coast designers and decision makers who drive manufacturing in Asia.
About 90 percent of the division's output involves masterbatches, with the remainder split between pre-colored resin and compounds of engineered resin.
Publicly traded specialty chemicals firm Clariant International of Muttenz, Switzerland, reported 2000 sales of 10.6 billion Swiss francs ($6.57 billion). The masterbatches division operates 52 sites on four continents and accounted for external sales of SFr 1.15 billion ($714 million).
Clariant claims it is the world's largest supplier of color and additive masterbatches, but PolyOne Corp. of Cleveland and Ampacet Corp. of Tarrytown, N.Y., have larger domestic market shares. Masterbatch makers compete with pre-colored resin suppliers such as GE Plastics.
Epson Portland — a unit of privately held Seiko Epson of Suwa-shi, Japan — had 2000 sales of 1.26 trillion Japanese yen ($11 billion).