Clinton, Mass.-based injection molder Nypro Inc. recently expanded service offerings to clients in Asia with its subsidiary, Nypro Plastics & Molding Products (Suzhou) Co. Ltd., adding automotive parts to its production line.
``We're trying to bring the technology and innovations we've developed in other markets and supply that to the automotive market,'' Nypro Automotive Group business manager Larry Bell said in an interview in Suzhou.
The facility in Suzhou manufactures Nypro's full range of products, covering the health-care, electronics and telecommunications, packaging, and consumer and industrial goods industries. The plant has 43 injection presses and provides clean room molding, bicomponent molding, in-mold decoration, printing and assembly, as well as custom manufacturing.
Adjacent to the molding plant are Nypro Tooling Suzhou Co. Ltd., and joint venture Nypro-Tsuda Surface Technology Co. Ltd.
New convenience for longtime clients
Producing auto parts may be new to Nypro's Suzhou plant, but the company has been a major automotive supplier in the United States and Japan for nearly two decades. Toyota Motor Corp. picked Nypro as its first U.S. molder 16 years ago, Bell said.
Nypro's decision to begin molding auto parts in China made strategic sense. Bell said the company's main customers, mostly Tier 1 auto suppliers, all have manufacturing facilities in east China, convenient to the Nypro Suzhou plant. They include Delphi Corp., Visteon Corp., TRW Inc., Johnson Controls Inc., Sumitomo Corp., Denso Corp. and Alps Electric Co. Ltd.
East China has become a hotbed for manufacturing interior entertainment systems, for example, which consume a lot of plastics and require sophisticated decorating techniques. Nypro's Tier 1 customers all reported 20-40 percent cost savings in China vs. North America and Mexico, according to Bell.
``Many customers do not have a good understanding of plastics or decoration of plastics, so if we get involved upfront, then we can take the costs out of the design,'' he said.
``We can advise on the best material, the best processes and the best technology, where you can take costs out. If the design is already in blueprint form, you're just comparing machinery costs.''
Nypro's long relationship with Tokyo-based Toyota has given the molder a strong base of Japanese customers. Nearly 40 percent of Nypro Automotive's sales come from Japanese original equipment manufacturers or Tier 1 suppliers.
The road ahead looks bright for Nypro's automotive unit, but Bell and sales and marketing director Jerry Chung agree that certain aspects of managing the firm's place as a global supplier remain challenging.
Apart from the usual risks, rising raw material costs and wages, eventual competition from local Chinese molders and a broad range of customer demands keep the team busy.
One customer asked for quotes on applications in Mexico, Moscow and China, Bell said.
``We have to show that we can develop the same product with the same quality at any of our locations in the world. Customers are concerned about whether we can produce the same quality product in Louisville, Ky., as in Bangalore, India,'' he said.
Chung said intellectual property protection and transparent communications remain major concerns for customers seeking to manufacture in Asia.
Bell said he thinks Nypro's ability to handle communications, logistics and intellectual property and privacy issues has been one key to its success. The firm has changed rapidly - in 1994 its main business was plastics molding. Now value-added services - including product and mold design, decoration, assembly and custom molding - account for 50 percent of worldwide sales.
Nypro Inc. posted sales of $957 million in fiscal 2005, with Asia sales making up 27 percent of that global total. Nypro has seven manufacturing facilities in China - located in Suzhou, Wuxi, Guangzhou, Shenzhen, Tianjin and Hong Kong - with 300 injection molding machines and more than 1 million square feet of manufacturing space.