Contract manufacturer and injection molder United Plastics Group Inc. will open its second plant in less than a year in Mexico this fall and Chief Executive Officer Richard Harris said the company's international expansion is far from over.
``I think that we could open a new plant every 12-18 months,'' Harris said in a May 31 phone interview. ``We will continue to expand our capacity in low-cost regions, build new plants and grow with key customers interested in a global footprint.
``Our main focus for now is China and Mexico,'' but Harris said he would not rule out expansion into other countries, such as India, for example.
The $5 million, 62,000-square-foot plant in Tijuana, Mexico, will give the company three plants in the country and comes on the heels of the opening of a $5 million, 53,000-square-foot plant in Monterrey, Mexico, late last year. In the past five years, UPG also has opened three plants in China to perform contract manufacturing for companies in the medical, automotive, electronic and consumer markets.
With the expansion, UPG now has 140,000 square feet of manufacturing space in China and 170,000 in Mexico. The firm has a total of 12 plants, including five in the United States
``Many of our customers were asking us to add more capacity in Mexico because they have facilities they want us to supply,'' said Harris, who took over as CEO of the Oakbrook, Ill., company in October.
The new plant will have a Class 100,000 clean room, and a white-room environment throughout the entire plant. While those features are attractive to its automotive and consumer product customers, Harris said they are particularly appealing to those in the medical industry. The site is ISO 13485-certified and registered with the Food & Drug Administration.
Currently, medical products account for 15 percent of UPG's annual sales, electronics 35 percent, consumer 25-30 percent and automotive 20-25 percent.
The Tijuana plant will operate three shifts, seven days a week, and employ 150. The site will have roughly 40 injection molding machines with clamping forces of 35-700 tons. Some of the equipment will be new and some will be moved to Tijuana from the United States.
``We still have excess capacity in the U.S, so we are moving equipment,'' Harris said. About 20 percent of the equipment will be in the clean room.
In addition to its proximity to customers and to Southern California, the plant will benefit from design efficiency, said Matt Langton, vice president, sales and marketing. He said the plant will feature ``a very logical and clean material flow.''
One example: The materials-handling system will be in a separate room off to the side. ``All of the resins and processes related to resins will be sealed off in a separate area and the material will be piped to the machinery through stainless-steel pipes that run overhead,'' said Harris. That creates a cleaner environment where there is less waste, he said. The plant also will use flexible, cell-based assembly.
Harris expects UPG's expansion to continue in China, where it has 300 certified suppliers.
``What you are seeing is UPG really expanding its business as a contract manufacturer,'' Langton said. ``Our customers want to outsource all of their manufacturing to low-cost manufacturing regions.''