With medical business now 50 percent of its sales, Tessy Plastics Corp. has formed a new subsidiary and will break ground on a facility in July.
``We need additional room because our medical sales have been growing by more than 20 percent each of the past five years,'' said Joseph Raffa, Tessy Plastics vice president and general manager.
Raffa spoke at Medical Design & Manufacturing East, held June 12-14 in New York.
``This will allow us to get virtually all of our medical production under one roof.''
Currently, most of the firm's medical production is split between two plants with combined space of 250,000 square feet in Elbridge, N.Y., where the company is headquartered.
The new 90,000-square-foot facility, also in Elbridge, will boost the company's medical capacity by 40 percent.
Subsidiary Tessy Medical Products LLC makes products used in minimally invasive surgery such as single-use endocutters used to close up patients after surgery; disposable end pieces for medical-diagnostic devices; plastic moldings for ophthalmoscopes and otoscopes; flexible tubes, or canulas, used to put cameras inside a patient's body to take diagnostic images; and plastic cartridges that hold sutures.
Johnson & Johnson and Welch Allyn Inc. are two of the firm's largest customers.
The heightened focus on medical products began almost six years ago after Tessy's printer cartridge business shrank when one of the company's major customers stopped making inkjet printers.
The change in strategic direction has coincided with a doubling of the company's annual sales, from just over $60 million in 2002 to $130 million in 2006.
The new plant will give Tessy Medical several competitive advantages, Raffa said.
``We will be able to ship out of one location. We will be able to create a manufacturing flow for the best efficiency. We will be able to house all medical-related disciplines under the same roof, so everyone is using common procedures,'' he said.
Raffa said the $16 million plant, which will include $6 million worth of new equipment, is likely to begin operating in the third quarter of 2008 with 50 people, but should reach 200 in 2009.
The new facility will include a Class 100,000 clean room exclusively for medical production.
The expansion is the sixth in the past seven years for Tessy, which has four other plants - two in Elbridge, one in Lynchburg, Tenn., and another in Shanghai. There are 25 injection molding machines in Shanghai and 35 in Lynchburg, Raffa said.
Raffa said Tessy will purchase an additional 80 all-electric injection molding machines with clamping forces of 30-300 tons for the new plant, bringing the number of presses dedicated to the medical business to 244.
The all-electric machines are more precise than hydraulic machines and reduce energy costs by 25 percent, he said.
Raffa said his firm has experienced 20 percent growth in medical recently - about twice the industry average.