U.S. cosmetics packager Portola Tech International is opening a new factory in South China in December, part of a $5 million realignment of its operations that includes doubling capacity at its plant in Czech Republic.
It's part of a shift in operations for the Cumberland, R.I.-based firm to add technology globally to meet market demands, even as it relocated from an old factory in Rhode Island last year and announced plans to lay off about 130 employees in the U.S.
“The main theme was to reorganize the
supply chain to get out of that [old] plant [in Woonsocket, R.I.] and be a global supplier of our technology in the three major markets: North America, Europe and Asia,” President Rick Schofield said in an interview at the CosmoProf Asia show, held Nov. 10-12 in Hong Kong.
For example, the new China plant, near Guangzhou in Nanhai, will give the company its first in-house vacuum metalizing capability in Asia, he said.
Eventually, the 150,000-square-foot facility in Nanhai will have about 15 molding machines, but it will begin as a metalizing and finishing facility, he said. Portola currently has metalizing capabilities in the U.S., at a newer facility in Cumberland, he said.
The firm is also consolidating some operations in Shanghai, where it does molding along with its parent company Portola Packaging Inc., Schofield said. Inflation pressures on manufacturers are higher in Shanghai, so the Nanhai operation will give the company additional flexibility, he said.
Portola Tech also added capabilities in th Czech Republic, bringing in about 20 compression molding machines to go with the 20 injection machines there now, and doubling the facility's size to 80,000 square feet, Schofield said.
The company completed the Czech expansion in early 2010, he said.
Each investment was motivated by local market needs and a strategy of bringing more of its vacuum metalizing and compression molding technology to Europe and Asia, he said.
The Czech expansion is needed because European firms want local suppliers and are less likely to import packaging, Schofield said.
The China expansion — now mainly focused on exports — is also aimed at capturing more business in China's growing domestic market, he said.
About two-thirds of overall growth in cosmetics in the next five years will come in emerging markets, he said.
“As we develop our capabilities [in China], they become an asset in pursuing the Asian markets,” Schofield said.
“We are a major supplier to the luxury skin-care market in Europe and the United States. Those markets are not going to grow as quickly ... as the Asian markets.”