Tech Group Inc. plans to merge its various partner companies in Asia under one larger, integrated umbrella of mold makers that will make it a stronger force on that continent.
The company in Scottsdale, Ariz., wants to create a regional powerhouse poised for further expansion and acquisitions in the Pacific Rim, said Hal Tashman, Tech Group co-founder and vice chairman of the new company, Tech Group Asia.
Singapore-based Tech Group Asia will boast a network of four mold-making sites and one design shop in Singapore and China, more than 1,300 employees and the capability to produce about 1,400 injection molds annually.
Sales figures for Tech Group Asia were not available. Singapore-based Omni Mold Ltd., one of the venture partners, recorded 2002 sales of more than S$32 million (US$17.9 million).
Tech Group will own close to half of the new company, which will be listed on the Singapore Stock Exchange, Tashman said. About a quarter of the shares will be floated publicly, he added. The merger still must gain regulatory approval, a process that could take four to five months, Tashman said.
``This gives us the ability to raise funds in a public-company environment for additional growth,'' he said. ``As an integrated company, we will have growth opportunities to explore in China and can better position the company for the future.''
Currently, Tech Group Singapore Pte Ltd., a unit of the molding and mold-making company, owns 19.5 percent of Omni Mold. Omni has two mold-building facilities in Singapore with a total of about 52,000 square feet.
Separately, Tech Group Singapore also operates an 80,000-square-foot tooling plant in Singapore and is a 70 percent partner in a 230,000-square-foot facility in Zhongshan, China, that has more than 800 employees. That facility makes injection molds and does molding.
All those plants will be integrated into the new operation, which primarily will serve customers in Asia for such markets as health-care parts, electronics, automotive and consumer products.
Current Tech Group management, including Chairman Steve Uhlmann, will serve on the board of the new entity, along with management both in Asia and the United States. The new board also will include Koh Boon Hwee, chairman of Singapore Airlines Ltd. and an investor in Tech Group Singapore.
``This is not like an acquisition of a new company that puts us at higher risk,'' Tashman said. ``It is one more step to bring everyone together in a larger environment.''
China represents more opportunities for Tech Group Asia, Tashman said. The company already has a presence in southern China, while Omni has a design center near Shanghai.
The current threat from the SARS virus, now spreading across parts of Asia, and the downturn in tooling does not dissuade the new company, Tashman said. Instead, it is considering longer-range growth plans.
``It will all unfold as we move along,'' he said.