Custom injection molder Moll Industries Inc. says its newly opened plant in Tucson, Ariz., will have operating costs anywhere from 10 to 20 percent lower than the shuttered Costa Mesa, Calif., plant it replaced.
The company is planning a significant expansion of its medical products business, where annual sales have already jumped from approximately $24 million to more than $60 million in the last three years.
``We expect to see a quantum leap in sales in the next 12-24 months on the medical side,'' said Joe Pack, vice president of sales and marketing of the privately owned, Dallas-based company.
Medical today accounts for 30 percent of the injection molder's $200 million in sales, up 10 percentage points from three years ago when the company's revenues were $120 million, Pack said.
``You can expect us to expand'' the medical products business, particularly in complex, niche markets where Moll can additionally manage logistics and supply-chain issues for customers.
The company has made three acquisitions since emerging from bankruptcy in June 2003 and has signed five-year contracts to manufacture products for two medical companies. Moll is owned by Highland Capital Management LP, a Dallas-based registered investment adviser that manages more than $20 billion in assets.
``We will continue to look for niche markets where our supply-chain and logistics expertise is needed,'' Pack said.
He said the new plant, which began operations last month and will be fully operational by the middle of this month, will employ 150. The workforce and the plant's output will be equally divided between medical products and precision custom products for consumer markets. Only a handful of the 35 workers at the Costa Mesa plant, acquired 15 months ago, chose to move to Tucson, even though all were offered transfers.
``The reason for the move was to lower our costs,'' Pack said. ``Our taxes, our utility costs, our labor costs and our infrastructure costs will be millions less than in southern California.'' Additionally, as a new business in Arizona, the company qualifies for training assistance and temporary tax relief.
The new plant will have a capacity of about 60 injection molding machines - about half of them for making plastic products for dental applications, drug-delivery products, disposable medical products and eye-care products. The machines have clamping forces ranging from 25-500 tons.
``We have moved all the equipment from Costa Mesa and are going to add some equipment,'' Pack said. ``We are also going to add pad-printing and hot-stamping operations.''
He said the 85,000-square-foot plant represents a 25 percent increase in capacity compared with the closed Costa Mesa plant and that it will have new material-handling equipment and a Class 100,000 clean room - two things the Costa Mesa plant did not have.
In addition, because the plant will have seven storage silos rather than just one, Moll will be able to use a centralized vacuum system.
The capital investments in the plant total $3.5 million.
The Tucson plant is one of three Moll plants that make plastics products for the medical industry; the others are in Seagrove, N.C., and Donegal, Ireland. About 40 percent of the company's sales are derived from sales to the appliance industry, largely to Whirlpool Corp.
``The key word as we move forward is balance,'' said Pack. ``We don't want to have any market or customer dominate us.''