Medical products are becoming a safe house for plastics molders stung by the exit of other business to Asia.
The medical industry in the United States continues to grow in size and technological scope, sometimes in converse proportion to other industries on the lam in Asia. Consider Exhibit A to be the case of Mack Molding Co.
In 2000, the Arlington, Vt.-based injection molder had three medical accounts, which represented less than 1 percent of company sales, said Jeff Somple, president of Mack's northern division. This year, after a large investment in equipment and product development, medical will capture a quarter of Mack's sales, Somple said. Mack recorded about $202 million in sales last year.
In 2000, a sizable chunk of Mack's sales came from the electronics industry. Today, most of that business has gone offshore, leaving Mack to readjust its strategies and customer base, Somple said.
It was not an easy time, as sales slipped for a few years. But with several medical-device parts now reaching the market, the company's sales are back up and it has made a transformation, Somple said. He has a goal to boost Mack's medical sales to half of the company's overall sales.
``We've moved from making a large volume of similar electronics parts to low to medium volumes of customized medical parts,'' Somple said at Medical Design & Manufacturing East, held June 13-15 in New York. ``It can be risky to move to medical parts. But as a company, we have low debt and can afford to wait quite awhile until parts go into production.''
That is the downside of becoming a medical molder. While Mack has made parts for medical devices, trays and other components, it took a great deal of time and capital to prepare those products for market, Somple said.
``Sometimes, they don't ever make it to production,'' he said.
Others are finding green pastures in medical molding. At the New York show, Jarden Plastic Solutions' eye-catching booth attracted customers to its medical products. Parent Jarden Corp. of Rye, N.Y., owns a playing-card company, so Jarden Plastic brought in a croupier to deal blackjack at the booth. Sunbeam blenders and Coleman coolers, manufactured by Jarden, were among the prizes.
Yet, the focus at the booth was on medical, an expanding area for the Greer, S.C.-based plastics unit of Jarden. Medical work now accounts for about a third of the firm's sales, said Jarden Plastic Solutions President and Chief Operating Officer Chuck Villa.
The company has been known for years as a molder of consumer packaging products and now makes in-house parts for many Jarden brands. But medical has helped drive the wagon, he said.
The company has hiked capacity utilization at its plants by more than 50 percent over the past year, much of it medical-based, Villa said. And it has hired a design firm in India to work on new products during overnight hours in North America, he said.
Now, the company wants to open a new plant in Mexico, possibly in Ciudad Juarez, in the next 12 months, Villa said. A plant in China also could be on the bill within the same time period, he said. Some of that growth will come from Jarden's high-volume packaging business. But medical has allowed the firm to fill in sales holes with new injection molded products, he said.
``We're continuing to follow the path our customers are taking,'' Villa said.
A more dramatic move might be the recent sale of Scottsdale, Ariz.-based Tech Group Inc. Lionville, Pa.-based West Pharmaceutical Services Inc., a giant in the disposable medical-products industry, acquired Tech Group May 20. The attraction for West was Tech Group's medical operations, even though Tech is also a large manufacturer of consumer products.
The purchase vaults Tech Group further into the medical mainstream. West could expand Tech's capabilities in drug-delivery components, said Tom Podesta, who leads Tech Group's health-care unit. West plans to create a separate drug-delivery unit that will use Tech Group products.
Tech could use space at West's plant in Williamsport, Pa., to mold delivery devices on the East Coast, a new geographic region for the company, he said. Other possibilities include expanding the blow molding area for medical parts.
West will allow Tech to continue on its current path, said Robert Hargesheimer, president of West Pharmaceutical's device group. Hargesheimer said the companies seldom overlap in products.
``We did not acquire Tech Group to close plants. What we plan to do is increase the capabilities for both companies,'' he said.
Others are following the path toward medical growth, even if it has meant leaving other areas.
Cycles Inc., a molder based in Sterling, Mass., has moved away from former electronics foundation to grow quickly as a medical-based company.
Today, about 80 percent of its products are in the medical arena, said New England sales manager Larry Costello. Cycles has a new plant in Tijuana, Mexico, and a major expansion in Sterling that have upped the ante for its growth in surgical devices and other parts, he said.
``It's been a good fit for us,'' he said.
Polymer Technologies Inc., an injection molder in Clifton, N.J., has undergone a similar transformation. The company now concentrates almost exclusively on medical and defense products, specializing in innovative materials and hard-to-mold parts, at a new plant that is close to 150,000 square feet, said engineering director Donald Olson.
The company, which uses such materials as surgical-grade polyetheretherketone and is adding metal injection molding for some products, used to be a toy manufacturer.
``Toys are not made here anymore, so we split that off completely,'' Olson said. ``Our focus now is innovation, and medical and military products give us those opportunities. A year ago, we tripled the size of our plant, took two machines out of storage and are now running at close to capacity. We've made a nice adjustment.''
Still, some caution is needed; a shift to medical parts from other markets is not always simple. Only those that can invest in pricier materials and lengthy product-development work should apply, said Robert Strickley, marketing director for equipment supplier Milacron Inc. of Cincinnati. And setting up a clean room absorbs time and hundreds of thousands of dollars, he said.
But medical does offer an advantage, he said.
``Medical customers are not as likely to move offshore as with other areas,'' Strickley said. ``It is a business that hasn't yet moved everything to China.''