Precision injection molder and contract manufacturer GW Plastics Inc. is tripling the size of its Dongguan, China, plant to 40,000 square feet.
``This gives the company an excellent global balance around the world and the ability to support our key customers no matter where they choose to operate as they optimize their supply chain,'' said Larry Bell, vice president of business development and market for the Bethel, Vt., company in an Aug. 1 telephone interview. ``We have focused on places ... our major customers are telling us will continue to grow in the future.''
GW derived more than 50 percent of its $67.6 million worldwide sales in 2006 from the medical market.
``We are becoming more of a health-care company,'' Bell said. ``That will be an increased focus of the company, and over time [will] become 60 percent of the business.'' Automotive is 30 percent and electronics, 10 percent.
Major health-care customers include Johnson & Johnson, Medtronic Inc. and Boston Scientific Corp.
Bell said the plant, which became part of the GW family through a January 2006 acquisition and is near Hong Kong, expanded so it can accommodate 30 injection molding machines ranging from 100-300 tons of clamping force. He said GW was ``one-third of the way'' along in outfitting the plant, and that it could be 18-24 months before it reaches full-production capacity.
``It is going to depend on how our customers' volumes ramp up over the next year or two,'' Bell said.
Initially, more than 50 percent of the plant's output will be for the automotive market, but longer-term, he said production will be balanced between the company's main three segments, with medical likely to represent the greatest volume of business.
``In the next six to 12 months, we expect to ramp up production for seat belt, air bag, fuel system and other safety-critical components,'' Bell said. GW plans to do the same for the connectors market and precision plastic gears for office equipment within the next year, he added.
He said it will take 18-24 months to reach full production in the medical market because of the validation process for those components.
The company sees the diagnostic areas, drug-delivery products and the device market as the strongest areas in that segment, Bell said.
He said the expansion, announced July 31, has been ongoing for six months and is nearing completion. The $1.7 million investment includes advanced tie-barless and electric injection molding machines from Engel Machinery Inc. and Fanuc Ltd.; high-speed computer numerically controlled machining centers from Brown & Sharpe Inc.; Unigraphics computer-assisted-design workstations, as well as coordinate measuring machine and electric discharge machining equipment.
``It is the same equipment that we have in our U.S. and Mexico plants,'' Bell said. ``We try to have the same equipment in all of our plants so that we have consistent methods and processes in molding. We want molds built in China to have the same level of quality.''
The China plant is certified under ISO 9001:2000 and TS 16949:2002. Bell said the company also added a Class 8 clean room, previously known as a Class 100,000 clean room, as part of its investment.
Bell said the plant has doubled the number of toolmakers and designers to 35 in its first 18 months under GW management, but the number of assemblers is still a ``small group'' because most of the machinery at the plant is fully automated with robotic arms and machine vision.
``How much direct labor will be added for assembly depends on how much value-added work our customers want us to provide,'' he said.
For the most part, he said components made in China will be for its customers doing final assembly in that region of the world.
``We would not mold in China and ship back to the U.S.,'' he said. ``We would mold there and ship to our customers with operations nearby.''
Bell said GW expects to continue to do engineering, design and development in its two Vermont plants and manufacturing in its Tucson, Ariz., and San Antonio locations.
``Where labor is a critical part, Mexico and China will be the prevalent areas for assembly,'' he said. ``If it is high-value and highly automated, we will look to the United States.''
The ongoing expansion of the company's plant in Queretaro, Mexico, announced in May, includes a Class 8 clean room and will create enough space to house 50 injection presses, compared with the dozen now at the plant.
GW doubled the size of the plant to 60,000 square feet.