Mold-component supplier Oberg Industries Inc. has expanded by opening a facility in a low-wage country that already has attracted some of its customers.
But Oberg has not gone to Asia or Eastern Europe, areas that have caught the attention of other toolmakers. Instead, Oberg has chosen Costa Rica.
``It gives us an opportunity to compete on an economic scale with other companies,'' said Dave Bechelier, division manager for Freeport, Pa.-based Oberg. ``And it's a heck of a lot easier to take a four-hour plane ride to Costa Rica than to fly all around the world.''
The Central American nation might not have captured the headlines given other foreign destinations. But Oberg, a privately held firm founded in 1948, had an opportunity there that made sense and will help it remain competitive, Bechelier said.
Oberg acquired a tool and die manufacturing facility in San Jose, Costa Rica, from Estampados de Precision SA. Estampados, a steel and carbide stamping operation, does work for an undisclosed medical-products supplier that also conducts business with Oberg, Bechelier said.
That connection led Oberg to explore the possibilities in Costa Rica, he said. After reviewing the market, Oberg found quite a few plastics processors and mold makers working in there, Bechelier said.
``It's primarily all plastics,'' he said. ``A few people were running stamping dies, but the tooling is 80 percent plastics-related.''
The acquisition, completed Jan. 10 for undisclosed terms, is the first step in Oberg's plans. The company will relocate the facility to a more-modern industrial park later this month and open a 10,000-square-foot plant there.
Oberg will refocus the operation to add a high percentage of components manufactured for injection mold builders, including mold inserts, core pins and bases. The facility also will supply repair services and make dies for steel parts, Bechelier said.
Wage rates in Costa Rica are 30-40 percent less than in the United States, and the country offers training schools and an educated work force, Bechelier said. Medical companies such as Abbott Laboratories Inc. also have operations in Costa Rica. But several U.S. toolmakers familiar with international work said they are not aware of a large mold-making community in the nation, bordered by the Pacific Ocean between Nicaragua and Panama.
``We've seen a slowing of the drive to shift work to Latin America,'' said Glenn Starkey, president of mold-systems supplier Progressive Components Corp. of Wauconda, Ill. ``That said, a lot is being done there and will continue in order for a company to be more China-resistant,'' he said. Starkey also is chairman of the global business council for the Society of the Plastics Industry Inc. in Washington.
``That's the first I've heard of much plastics business in Costa Rica,'' said James Meinert, a tooling consultant in Mequon, Wis., who specializes in international work. ``I was there recently, and I know there are a number of factories, including one for Intel [Corp.]. So it wouldn't surprise me if toolmakers starting looking at it.''
Oberg plans to send most of its products back to the U.S. market. Until it bought the Costa Rica site, Oberg had clustered its seven plants in two locations: Chandler, Ariz., and Freeport, Pa., a suburb of Pittsburgh. It also has sales offices in Germany and Singapore.
``We didn't really move to Costa Rica to serve that market,'' said spokesman John Becker. ``We're primarily interested in taking advantage of the domestic market, especially those opportunities that have been missed here because of Asian imports.''
Oberg recorded sales of $100 million in 2002, Becker said. Oberg started as a maker of precision stamping dies and components, but has expanded to include mold building and components, plating and some injection molding and plastic-parts assembly.