Nypro Inc. has opened a mold-making shop in Moscow, funding it in part with a $2.7 million U.S. government loan.
Nypro opened the toolroom in October because it is seeing more demand from U.S. companies that have set up operations there, said Gordon Lankton, chairman of Clinton, Mass.-based Nypro. The mold-making shop, part of Nypro's existing injection molding plant in Moscow, has 27 toolmakers in about 15,000 square feet of space. Nypro said it invested more than $1 million of its own money.
The company used financing from the Overseas Private Investment Corp., a federal agency that loans money to U.S. companies for overseas operations. This is the first time Nypro has used OPIC funding, but it is interested in doing so again, Lankton said.
The loan has an interest rate comparable to those offered by U.S. banks and requires that the foreign operation be put up as security, Lankton said. OPIC also required Nypro to show that it was not transferring work that otherwise would be done in the United States, which Lankton said the firm demonstrated by showing that customers like Gillette Co. and Ford Motor Co. require local components for their Russian factories.
Nypro said its Russian operations have become profitable in the past two years, after not making money for a decade, because Russia's economy has picked up.
Nypro probably would have built the mold-making shop without OPIC funding, but was able to buy better equipment, Lankton said. He said the OPIC process was ``cumbersome,'' but the company used Arlington, Va.-based Mu¤oz Investment Banking Group LLC as its financial adviser.