Health-care molder Merit Medical Systems Inc. is spending $25 million to double the size of its manufacturing space in South Jordan, Utah, and significantly boost molding capacity. The project will accommodate growth in the cardiology and radiology markets.
Merit plans to double the size of its headquarters facility within a year, giving it about 360,000 square feet of molding, electronics assembly and computer wafer-chip manufacturing.
Spokeswoman Nancy Schultz said the firm will add three or four injection presses immediately to its current 24, and plans to add others as it anticipates demand growing - possibly as many as 35 or 40 within a few years. The new facility will have room for 64 machines.
The publicly traded company, which makes disposable medical devices like diagnostic catheters and specialized digital devices for inflating balloons on stents, has been on a growth spurt. Sales rose 16 percent through the first nine months of the year and profit jumped 53 percent, to $100.2 million and $12.6 million, respectively.
The company plans to finance the expansion entirely on cash flow, holding its $31 million cash reserve for acquisition opportunities, Schultz said.
Merit announced the expansion Dec. 1.
The new space will consolidate two smaller Merit operations, a wafer manufacturing plant in Santa Clara, Calif., and another manufacturing space nearby in Salt Lake City. The company also said it plans to more than double a 30,000-square-foot plant in Galway, Ireland, where it assembles guidewires - small devices that place balloon angioplasty catheters within a patient's arteries.
Schultz said the medical business remains strong generally, but she also said Merit's sales are outpacing the market.
The company is growing 12-15 percent a year, while the growth in underlying markets for cardiology and radiology devices is only 8-10 percent, she said.
The company is gaining market share because it is smaller than competitors such as Boston Scientific Corp., Guidant Corp. and Medtronic Inc., and it focuses on its niche. The company has 50 percent of the market for inflation devices, she said.
``Medical devices, particularly disposable products, are rather recession-proof,'' Schultz said. ``Our business is just going to continue to have high demand.''
The company hopes the expansion will let it grow its electronic sensor business, using the computer wafer chips it manufactures. About one-third of the chips are used in the company's medical devices, with the rest sold to the automotive and undersea diving industries.
The company anticipates adding 300-500 employees in South Jordan over time. It employs 1,200 worldwide now.
Merit Chairman and Chief Executive Officer Fred Lampropoulos also may run for office as Utah's governor, and has spent at least $350,000 in radio ads to boost his name recognition, according to a report in the Salt Lake Tribune.
Security and Exchange Commission filings say Lampropoulos, who has been the top executive since the firm started in 1987, owns more than 650,000 shares of Merit stock worth an estimated $14 million.
Lampropoulos would join another plastics executive in the race for the Republican gubernatorial nomination, former Huntsman Corp. executive Jon Huntsman Jr. Former Utah Gov. Michael Leavitt left office last month to head the Environmental Protection Agency.