United Plastics Group Inc. will open new injection molding plants in China and Mexico, continuing its expansion into those lower-cost production areas.
The company will start a 100,000-square-foot facility in Suzhou, China, near two other UPG facilities in that country. The site is in a free-trade zone that allows the company to ship parts overseas without paying hefty trade duties, said Chuck Hoar, vice president of strategic business for Westmont, Ill.-based UPG.
The Suzhou plant, opening in stages starting this fall, represents a $10 million investment in building and equipment, said Hoar, interviewed during the Medical Design & Manufacturing East show, held June 13-15 in New York.
UPG also will open its second facility in Apodaca, Mexico, by the third quarter. The site, near Monterrey, will have 85,000 square feet and can accommodate as many as 25 injection molding presses, Hoar said. The company is investing more than $5 million initially in the location.
The Mexico facility will add equipment and business from UPG's El Paso, Texas, plant, which is slated to close by the end of June.
``It's a continuation of our strategy [from] when we decided to exit the El Paso plant,'' Hoar said. ``Our customers are in Mexico, and we wanted to be in an area where we could manufacture for less. It makes for a terrific hub, and we can support Laredo, [Ciudad] Juarez and Reynosa from that location.''
The company will ship equipment from the El Paso site, a 62,500-square-foot plant that has 37 injection presses, and will not need to buy much new equipment immediately, Hoar said. The plant will be a sister operation to an 85,000-square-foot Apodaca facility.
That facility was purchased in 2000 as part of UPG's acquisition of the SPM unit of Dynacast International Ltd. Both facilities will serve a range of UPG customers in medical, consumer, automotive and electronics markets, Hoar said. The China plant will serve similar markets.
The company will find no shortage of skilled labor in Monterrey, he said.
With many electronics companies moving to Asia, there is a glut of workers in the country. Several good technical schools near Monterrey also produce trained workers.
The Suzhou plant joins a growing hub for UPG. The company started an injection molding operation in Suzhou in 2002 and launched a nearby tooling and engineering center last year. All the facilities are wholly owned by UPG.
The third facility, in an enterprise zone, will earmark products that can be shipped outside China and made for less inside the country, said Tom Opielowski, vice president of Asia operations and global engineering. Opielowski was contacted by phone in Suzhou.
During the next two to three years, the company will add as many as 60 injection presses to the new plant, Opielowski said. The building will be completed by the end of July, and a 25,000-square-foot assembly area should start later this year.
A Class 100,000 clean room will hold as many as 10 machines. The company is looking at presses with clamping forces of 80-450 tons and will start molding by January, he said.
``We'll ship products all over Europe, Asia and the United States,'' Opielowski said. ``We look at these as [parts] with value-added assemblies that can be molded from higher-end machines.
``We plan to train workers and service machines using local [employees].''
The moves represent a return to aggressive growth for UPG after several years of management changes, lower sales and debt issues. The company originally grew by rolling up several other injection molders to create a larger company, taking on high debt in the process.
UPG has made a shift from an electronics base to one that is more diverse and less dependent on one market, according to William Featherstone, vice president of sales and marketing, at the show.
``Electronics is still an important part of our business, but we've grown in other areas,'' he said.
UPG has cut its debt and found greater stability, Featherstone said.
The company still is searching for a permanent chief executive officer after the resignation in April of Shannon White. Chief Financial Officer Richard Harris has assumed the temporary position while a search continues, Featherstone said.
Hoar made it clear that UPG still plans to injection mold many of its parts in the United States, where it has five plants.
UPG is controlled by private equity firm Aurora Capital Group of Los Angeles.
The company was tied for No. 45 this year in Plastics News' ranking of North American injection molders, with $160 million in relevant sales.
