United Plastics Group strongly is considering construction of a second injection molding plant in China, in Guangzhou, in its push to establish a larger global footprint and diversify its business.
UPG, based in Westmont, Ill., wants to have the 100,000-square-foot facility operating by the first quarter of 2004. But UPG executives said in an interview at the Medical Design and Manufacturing East show that no final decisions have been made.
There's a ``very, very high chance it will happen,'' said Chuck Villa, commercial executive vice president. A final decision depends on customer contracts and funding, he said.
The plant also would perform assembly work, and would have 20-24 injection presses serving customers in consumer products, medical and electronics end markets. UPG currently has one plant in China, in Suzhou, with 16 presses. UPG plans to start a tool shop there in the fourth quarter.
In Asia, the company first wants to target Asian-based manufacturers, then go after U.S.-based firms looking for U.S.-based partners, he said.
While its move to Suzhou last year resulted from work shifting from North America to Asia, Villa said the new plant in Guangzhou and stronger presence in China will make it more likely to win business in the United States.
``Our strategy is, this will drive business in the U.S.,'' Villa said.
UPG had been hard hit by the migration of electronics molding to low-cost locations in the Pacific Rim, but is seeing its sales in medical and consumer products business grow, said Chuck Hoar, vice president of medical.
UPG's health-care business will double, and will account for 15-20 percent of its overall North American sales of about $250 million this year, Hoar said.
The firm is investing about $500,000 to put 16 presses in its Anaheim, Calif., facility into a Class 100,000 clean room, he said. It also has beefed up health-care and consumer product staff, even as it has laid off workers tied to its electronics business, he said.
UPG would like to apply some of its expertise in designing hand-held electronics devices to developing medical instrumentation, Hoar said.
Electronics accounted for more than 70 percent of UPG's business three years ago, but that figure is down to 50 percent now. The company wound up shedding several plants, and it laid off about half of the workers at its Bensenville, Ill., plant when $65 million in business moved to the Far East, Villa said.
The company feels it has emerged from those troubles, and does not expect more layoffs or plant closings, he said.
``Our footprint is certainly to our liking in the U.S. [and] our plans are to expand in Asia and Eastern Europe,'' Villa said.