Tessy Plastics Corp. has dramatically expanded the size of its Shanghai plant and moved some injection presses from the United States to set up its first molding operation in China.
Elbridge, N.Y.-based Tessy moved five molding machines to Shanghai in late May to do work for Xerox Corp., said Tessy President Henry Beck. Previously, the company made the parts in the United States and did final assembly in a 15,000-square-foot plant in Shanghai, but it opened a 60,000-square-foot operation in mid-May to begin molding parts in China.
``In order for Xerox to be competitive, it has to be molded in China,'' Beck said. He added that ``other customers have an interest in having us mold in China.''
Beck declined to say what parts the company makes for Xerox but said it is for the Asian market.
The company has room for more presses but is ``playing it by ear'' to see if more will be added, he said.
The investment thus far has been relatively small, about $1 million, Beck said.
The plant's presses range from 80-400 tons.
Tessy has moved quickly in China. The company set up the small assembly operation there last year and always intended to expand its operations to include molding in Shanghai, its only Asian plant, Beck said.
The work that shifts to China has not reduced employment at Tessy plants in the United States, but the company did lay off about 200 temporary workers recently at its Elbridge plant and at a factory set up to mold for Telefon AB LM Ericsson in Lynchburg, Va., Beck said. That reflects general economic softening, though, not jobs lost to overseas expansion, Beck said.
Business in Asia will likely grow to serve Tessy customers who want to manufacture for that market, Beck said.
``It's a growth business that does not really threaten the U.S. business,'' he said.
Tessy also is looking for a toolmaking partner in China and is interested in a local or foreign shop that would be interested in working in Tessy's space in Shanghai, Beck said.
Tessy employs about 150 at the Shanghai plant when operations are running at peak, but that figure is down to about 60 now because there is a break in product lines, he said.