GW Plastics Inc. is opening its first facility outside the United States, an injection molding plant in the central Mexico city of Queretaro to serve automotive and health-care markets.
The Bethel, Vt.-based firm plans to open the new facility by September with five to 10 molding machines, and anticipates having 20 presses there within two years. Company officials declined to disclose the size of the investment.
While many of the larger manufacturers GW serves operate in Mexico for low-cost labor, GW officials said that's not a big part of their thinking. Most of the Vermont company's current production at its factories in Tucson, Ariz., and San Antonio is shipped to Mexico. The Queretaro site will allow the company to cut shipping costs and time, said Ben Bouchard, vice president of marketing.
Privately owned GW said the Mexico site will use the same technology as its other sites, including insert molding, two-shot molding and clean room manufacturing.
``Maybe there are some other molders and suppliers who will move to Mexico to take advantage of low-cost labor,'' said Art Bennert, vice president of operations. ``That is 180 degrees different from why we are going there. We are bringing our highest level of technology to central Mexico.''
The work in Mexico is mostly new business for existing customers, and there will not be any layoffs at any of GW's four U.S. operations, Bouchard said. The new plant will free up some needed capacity at the U.S. facilities, he said.
``This allows us to support our existing and new customers deeper into the interior of Mexico,'' he said.
The Queretaro plant, about two hours northwest of Mexico City, will open with about 20 employees. GW anticipates needing 20 presses eventually and could employ as many as 100. The company could expand into assembly work there, but initially it sees the business focused on injection molding, Bouchard said.
GW said the leased plant has 28,000 square feet, with room to expand to 52,000 square feet and 40 presses. At first, it will have presses with clamping forces up to 230 tons, but it can accommodate machines up to 500 tons.
Queretaro will start with mainly automotive work, but the company, which tries to split its business between autos and health care, said it does see increased interest in Mexican manufacturing from its medical customers.
The company continues to evaluate locations or ventures in Asia, which may have pure labor cost advantages over Mexico, Bouchard said. But for applications that require more technology or safety-critical parts that need close watching, he said GW believes Mexico retains advantages.
``The demand was much more immediate in Mexico,'' he said.
GW has about $65 million in annual sales and employs 440.