Minnesota mold maker Advance Tool Inc. and Hong Kong-based Titron Industries Ltd. formed a marketing and technology development joint venture June 14 to tap into what they see as a shortage of topflight mold making in China.
Blaine, Minn.-based Advance will provide experience in building very high-cavity molds, while Titron will provide the manufacturing with its sprawling operations in mainland China.
Advance had been looking at building a Chinese mold-making operation to replace its Malaysian tool-building plant, which it sold to a customer late last year. But company officials said overcapacity in China's mold-building industry persuaded them to take another route.
The company feels it needs a presence in China to stay abreast of large multinational customers who are reducing their supply chains, said Wayne Shakal, director of business development for Advance. Plus, it saw a need for high-quality molds in China, he said.
``There is a gap in China in being able to find mold suppliers who can do the kind of high-cavity work needed by Procter & Gamble and Gillette and others in the medical disposable and consumer disposable markets,'' he said.
The venture, which is 50 percent owned by each company, will be housed in Titron's 500,000-square-foot, 2,500-employee mold-building operation in China's Guangdong Province, across the border from Hong Kong. The companies are not making equity investments in each other.
Titron also has injection and blow molding operations, along with clean room operations and printed circuit board manufacturing.
Advance is supplying the management team, experience in high-cavity molds and U.S. engineering and project management services, when needed, Shakal said in a June 15 telephone interview. The venture will take over only a portion of the Titron facility.
Titron was interested in exploring the venture last year after it made a high-precision, 144-cavity mold, its first, for a large medical product manufacturer. The company successfully made that mold but realized that it could benefit from working more closely with a ``top-tier Western mold maker,'' said Stuart Patton, business development director for Titron.
``Technology development is a key strategy,'' he said in a June 14 statement. ``The joint venture will introduce a unique tool-tracking system that will offer many advantages to users. Global [original equipment manufacturers] who move their production lines around the world are looking for better ways to efficiently track their expensive assets, and tooling is no exception.''
Shakal said Advance does not worry about transferring technology and expertise to others, because the company feels it must continue to innovate to remain competitive.
``We are still going to push the envelope on technology here,'' he said. ``I see mass globalization offering more opportunities for everyone.''
Advance had sales of $16 million last year, with 85 workers in Minnesota and 40 in its former Malaysian operation, Shakal said.
He declined to reveal specific sales projections for the new joint venture but said, ``I see it potentially being at least half'' of Advance's sales at some point.
The joint venture will be called Advance Titron International and will be based in Hong Kong.