Thin-gauge thermoformer Placon Corp. will open a plant in China in October, becoming one of the first U.S.-based thermoformers to launch its own manufacturing facility in that Asian nation.
The 60,000-square-foot facility in Suzhou, China, will be the first for Placon outside its headquarters in Madison, Wis. The company hopes to regain some of the retail business that has moved steadily overseas during the past five years, said Chief Executive Officer Jan Acker.
``We've seen significant movement of that business offshore to China,'' Acker said on June 4. ``We can't just let the business go and replace it with something else. We have to follow it up and get back the business that we lost.''
The new plant will serve the market in China and will not take jobs from the United States, he said. If all goes well, the company eventually would like to add one or two more facilities in China, he added.
``You have to keep moving with the world,'' Acker said.
The facility will make custom and stock packaging for consumer, food and medical goods. The company has hired a Chinese national, Liang Ying, to head the operation. Ying has a master's degree in business administration from the University of Wisconsin.
Placon officials went to the business school to find eligible candidates and were flooded with resumes, Acker said. Ling had experience working for a multinational company with ties to the United States and China. He grew up near Suzhou, about 55 miles northwest of Shanghai.
``Today, China is the supplier of choice for moderately priced retail consumer goods,'' Ying said in a news release. ``China is quickly becoming a force in high-tech manufacturing as well.''
The company purchased an existing building in a large industrial complex that was picturesque by U.S. standards, and dotted with large end users, Acker said. Placon plans to hire about 25 employees and put in three or four thermoforming lines once the plant starts this fall, he added.
Few other North American thermoformers, especially those in packaging for retail products, have ventured to China, said thermoforming consultant James Throne of Sherwood Technologies Inc. in Dunedin, Fla. The move is a bold one, but makes sense for Placon, he added.
However, China presents some risk for midsize thermoformers. Among those are the threat of terrorism and the potential for a souring economy to close shipping ports to North American traffic, Throne said.
Another is the threat that a customer eventually will move to another part of the world, such as Eastern Europe, where manufacturing also is low-priced, he added.
Other thermoformers might watch Placon to see if the market is ready in China before they decide to go there, he said. But Throne does not expect a mass onrush of companies starting plants in the Land of the Dragon. Most thermoformers specializing in food or medical products work with North American customers, he said.
``If Placon is successful, a few more thermoformers might go there,'' Throne said. ``But I don't think there will be a huge groundswell over there. Other guys in the same order of magnitude as Placon are not in commodity-type packaging.''
Placon makes a lot of retail items that are integrated into products that already are made in China, Acker said. Being close to those customers was critical, he added.
Initially, Placon will generate sales from the United States, contacting its broad customer lists to seek out those that source in China, Acker said. Eventually, the company plans to open a sales office in China, he added.
Placon ranked 24th on Plastics News' listing of top North American thermoformers, with $51 million in sales last year.