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April 21, 2008 02:00 AM

ProMed branching into medical molding

Brad Dawson
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    Minneapolis-based custom silicone molder ProMed Molded Products Inc. is branching out to supply injection molded parts made from polyetheretherketone for long-term implantable and bio re-absorbable medical applications.

    The company also is expanding its Puerto Rico manufacturing operation, adding a facility, several presses and more employees, according to President Wayne Kelly.

    The entry into PEEK molding makes sense for ProMed because, while the firm is traditionally a silicone molder, its core industry is long-term implants, Kelly said. PEEK is a plastic that has mechanical traits -strength, rigidity, insulation and ``snap-fit'' - that are desired in the implant field, he said, and suppliers have developed medical grades in the past few years.

    PEEK Optima medical-grade compounds are very expensive, in the range of $1,200 to $1,500 per pound. ProMed believes it has an edge on the competition via its partnership with an entrepreneur who it said has developed a process that molds the material accurately yet reduces a significant amount of waste.

    For example, ProMed analyzed one particular component for a large original equipment manufacturer, and projecting the demand for the part, estimated PEEK molding process would save it $2 million annually in materials.

    ``It's just a very unique process that saves the scrap generated via conventional molding,'' Kelly said.

    ProMed said the inventor of the process does not want to be named.

    In addition to the low waste generated by the molding press, its footprint is smaller and the machine and the tooling are relatively inexpensive, he said. Large customers of ProMed's - some of whom have been reluctant to use high-grade PEEK components because of their costs - now are ready to talk about it.

    ``This could be a huge driver for us in 2008 and 2009,'' Kelly said. ``It would be a great opportunity for us and solve some problems for our customers.''

    Puerto Rico plans

    Meanwhile, the company president said he's happy with the production and quality coming of the firm's ProMed Caribe LLC operation in Dorado, Puerto Rico. ProMed set up the unit several years ago to be close to some customers that do local device manufacturing and to provide a low-cost option.

    By late 2008, ProMed will acquire and equip a new 11,000-square-foot facility, pairing it with a separate 5,000-square-foot plant at the site. The factory will include a 1,500-square-foot clean room and have the capacity to house 16 presses and up to 130 people, according to Connie Laumeyer, ProMed's sales and marketing manager.

    Kelly said customers must have their component processes requalified when they move from one facility to another and most are trying to do it as fast as possible to have parts manufactured at the ProMed Caribe site.

    About 85-90 percent of the nation's medical devices are manufactured in Puerto Rico, according to Kelly. Tax incentives are provided for device manufacturers, and tax rates for suppliers like ProMed are quite a bit lower, he said.

    Labor and health-care costs also are in the range of 30 percent cheaper, he said.

    ``There's a new model that's evolving in our industry, where the design and development and specialized production remains in the U.S. - like in Minneapolis - while some of the high-volume production is being migrated out to lower-cost environments, such as Puerto Rico,'' Kelly said.

    In Minneapolis, ProMed also will continue to house its corporate departments and the bulk of its manufacturing, including its quick-turn and complex parts operations, Laumeyer said. ``Our core customers, our bread and butter, are there. That won't change anytime soon.''

    ProMed - which employs about 200 globally - increased its sales 20 percent in 2007 over the year before, and given most of its customers have grown by single digits during the same period of time, ``we can be very proud of that,'' Laumeyer said.

    Despite its production and sales increases and the expansion in Puerto Rico, ProMed has been stingy in filling empty space. When the other tenant at its 60,000-square-foot facility in Minneapolis left several years ago, the company had 25,000 square feet of area to use. It developed a pharmaceutical device manufacturing area, expanded some offices and set up a clean silicone molding area for a high-tech industrial client, but kept its options open, Kelly said.

    ``It's definitely a planned strategy'' to leave room to expand while doing more with lean processes, he said.

    ``When you see an opportunity, you can't go get space. You have to have it there, ready to go and ready to use fast. When other opportunities have come up, we haven't had to think twice, and the same is true with the PEEK molding. These are things we didn't foresee but we've been able to capitalize on as they've come up.''

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