China seems to be a trump in Mocap Inc.'s growth strategies in the global rubber and plastic cap and plug market.
The custom injection molder of St. Louis is not only starting to make a new proprietary line of products exclusively at its facility in Zhongshan, but also expects the low-cost in-house tooling in China to spur business for its U.S. and United Kingdom factories.
A $4.2 million investment, the 75,000-square-foot China operation will injection mold polyethylene caps and plugs, including a taper-type plug, unthreaded caps and plugs, finishing plugs that go into sheet metal, and furniture glides.
The company's existing product lines include dip molded and injection molded rubber and vinyl caps and plugs.
``We are just finishing up the tooling for the first series of tapers'' at the China factory, said Paul Miller, vice president of operations. No sales will be generated until the end of the first quarter, he said .
As Mocap is introducing the new line in North America and Europe and later in China, all products made in the China plant will be exported for the first six months.
``Thereafter, we expect to increase domestic [Chinese] sales,'' Miller said.
Mocap's first move into China dates back four years, when the company began outsourcing injection molds from Guangdong province. Immediately, the privately held company registered its trademark in English and Chinese. The application was submitted in 2002 and approved in 2004.
``So far we haven't been confronted with any [intellectual property] issues,'' Miller said.
The local market
Mocap aims to mold 20 million to 30 million parts ``at minimum,'' in China during the first year, Miller said.
The operation, Zhongshan Mocap Industry Co. Ltd., is a 70-minute ferry ride from the Hong Kong airport. It launched production in August with 40 employees.
Miller said the China plant will add 30-40 injection molding presses in the next two years to the handful already installed.
``We are looking at brands like Chen Hsong, Haitian and potentially some of the German machines,'' he said.
The machines will have clamping forces of 88 metric tons to more than 500 metric tons.
Mocap expects to see some cost savings with labor, material and overhead. But more importantly, said marketing and sales Vice President Greg Miller, ``We see it as an opportunity to grow the business.''
Like many suppliers for the auto industry, wire and cable, lawn and garden and industrial goods sectors, Mocap is following its global customers that have relocated to the Asian rim.
``We are not limited to any special trade zone,'' said Greg Miller, Paul's brother. ``We would like to participate in the local market in China.''
``There's a big, growing opportunity in China, because there's not really anybody over there doing what we are going to be doing,'' Paul Miller added.
What is unique about Mocap's China operation is its in-house mold-making capability, Paul Miller said. He expects the Chinese plant to produce 40-50 sets of injection molds per month.
``We expect [a] 30 percent or even greater [annual] growth rate in China,'' he added.
The Chinese facility goes hand in hand with Mocap's global strategy of moving heavily into custom molding.
``The advantage Mocap has over other cap and plug makers is the China facility,'' he continued. The company said it is not aware of any competitors manufacturing in China.
With the mold-making shop in China, Mocap is able to offer tools to customers at low prices, or even free.
The company said it offers three different quotes: a U.S. price, a European price and a China price, with separate lead times. That gives customers more choices to meet their specific needs.
``The customer gets the in-house Mocap China-built mold, but can use it in any Mocap facility,'' Paul Miller wrote in an e-mail to Plastics News. ``If the customer needs a three-week lead time on parts, we can ship the mold to the USA or United Kingdom plant.
``If the customer can wait for a longer lead time, due to sea freight, then China becomes a better option. Customers can compare foreign and domestic pricing without having to be concerned that they are dealing with resellers,'' he wrote.
Mocap said it is using the China plant specifically to help keep and grow its molding production in North America and Europe.
The company is adding 100,000 square feet of manufacturing space among its three facilities in the Unites States and the United Kingdom - in Park Hills and Farmington, Mo.; and Telford, England - in the next two years.
The Park Hills site started dip molding in 1982 and injection molding in 1994. The rubber and plastic caps are used in the auto, metalworking, masking, wire and cable, refrigeration, lawn and garden, and medical industries.
After Mocap acquired the dip molding business of Steere Enterprises Inc. of Tallmadge, Ohio, in May, Steere's equipment was moved to the plant in Park Hills. Steere was a pioneer in dip molding 56 years ago. Steere remains in business, concentrating now on blow and injection molding.
With the acquisition, Mocap has added about 20 workers at the Park Hills site. The firm employs 250 in total. It has sales offices in Mexico, Italy, Germany and France. The Millers' father, Joseph, is president of the firm.