Joining a growing list of medical firms seeking low-cost manufacturing locations, Plastikon Industries Inc. said Jan. 10 it is opening a thermoforming and injection molding plant in China.
Plastikon plans to spend $3 million to start a 125,000-square-foot facility in Leibo, near the coastal manufacturing hub of Shenzhen, where it will produce and assemble high-volume diagnostic parts for export to the United States.
Company executives said in an interview at the Medical Design and Manufacturing West trade show in Anaheim that normally conservative medical-device manufacturers are showing more interest in Asian production for the North American market. Traditionally, liability and regulatory concerns have made some medical manufacturers more reluctant to move production offshore, industry executives said.
``Medical companies are no longer overwhelmed by the stigma of `Made in China,' '' said Kaveh Soofer, vice president of Hayward, Calif.-based Plastikon. ``We see a strong technical basis in China.''
Plastikon initially will serve one customer, with a thermoforming line, three injection presses and 40 employees. Some of the plant's work will be business moved from the United States, but other work will be new business, said account manager Bret Baumgarten.
All of the 70,000 square feet of manufacturing space will be in at least a Class 100,000 clean room, and some assembly could be in a more stringent clean room. The factory will have space for three more thermoforming lines, 15 injection presses and as many as 250 employees, Soofer said.
Baumgarten said the small, privately held company established a joint venture with an unspecified company in Hong Kong eight years ago to build molds and mold parts. Plastikon sees the new plant in the same light - establishing a foothold where U.S. medical-device companies are showing increased interest.
``Only an experienced company can take advantage of this,'' he said. ``We feel like it's a market that isn't being tapped.''
Plastikon has about $38 million in annual sales from its sole plant in Hayward, with about 50 percent of that in the automotive market and 40 percent in medical. Beyond the Hong Kong joint venture, the firm has another joint venture with a minority-owned firm, Trim-X, in Imlay City, Mich.
The Leibo plant will be dedicated to medical work, Soofer said. The facility, which is to begin operating in April, includes 25,000 square feet of dormitories and 30,000 square feet of offices.