Flextronics International Ltd. is expanding its China operations, including a Shanghai-area injection molding facility and a Shenzhen-area toolmaking site.
Globally, Flextronics operates more than 1,100 thermoplastic injection molding machines in 17 plants on 11 sites. The Singapore electronics contract manufacturer has sites in China, Hungary, Mexico, Poland and Brazil and reported profit of $388.4 million on sales of $15.9 billion for fiscal 2005, ended March 31.
``Our goal is to grow [molding capacity] 20 percent this year,'' Chris Morton, senior director of plastics worldwide, said in a recent telephone interview. The firm has purchased about 40 machines so far in 2005, emphasizing precision and multicomponent capabilities.
With its manufacturing range, Flextronics promotes its ``ability to put forth a credible solution anywhere in the world,'' Michael McNamara, Flextronics chief operating officer, told security analysts May 12.
While Flextronics is investing heavily in China, ``long term, China may not be the solution,'' McNamara said, mentioning Mexico and Eastern Europe - already Flextronics locations - as places where the company might invest to balance its capabilities.
Flextronics is completing work on its newest molding operation, on a corporate campus in Shanghai's Pudong industrial zone. That plant has sophisticated painting capabilities and will use 30-35 presses initially. Improvements will be finished in August or September, Morton said.
The company started molding parts at another China campus about five years ago and, during 2004, moved about half of its 18 machines to the new site. Flextronics disposed of the other presses and is acquiring 26 new machines.
Meanwhile, Flextronics is ``playing catch-up on tooling'' for plastics processing, Morton said. The company now can make more than 3,000 molds a year, but ``we need to grow to 4,500 by the end of 2005.''
An enlarged toolmaking operation opened in late April near Shenzhen. The site, which was doubled to 100,000 square feet, employs 400 and plans to go to 750. The operation includes advanced technologies for laboratory development of molding processes and plastics rheological analyses. In addition, the plant will have 16 presses of 25-750 tons for everything from ``quick-turn prototypes up to high-volume molds,'' Morton said.
By May, that plant aims to manufacture 300 molds per month. ``We are doing about one-half of that volume now,'' Morton said.
Three molding operations at Flextronics' Zhuhai operation in southern China run about 200 presses of 200-1,100 tons, Morton said. One site has clean-room and painting capabilities; a second is near high-volume sheet-metal processing for telecommunication boxes and personal computers. The third site also has painting capability and deals with larger products such as servers and notebook components.
Flextronics is increasing its molding of microcomponents, particularly for use in the explosive market for camera modules for cellular telephones.
``We are one of the largest producers of camera modules in the world,'' Morton said.
Flextronics' fiscal 2004 cell phone customers included Sony Ericsson Mobile Communications AB, Alcatel SA, Motorola Inc. and Siemens AG.
Joint venture Sony Ericsson accounted for about 11 percent - $1.6 billion - of Flextronics' total 2004 sales of $14.5 billion. Hewlett Packard Co. represented about 12 percent.
Flextronics also sees growth opportunities in medical products, a market it has served for a decade. The firm projects 2006 sales for that segment at $432 million, compared with 2005 sales of $188 million.
Morton is based in New Braunfels, Texas, and spends at least seven weeks per year each in Asia and Europe.
Flextronics had three injection molding plants in New Braunfels until mid-2002, when it closed those operations and shifted the work to China. Today Flextronics Plastics' technical services group employs 15 in Texas.