Scottish plastics processor and decorating firm John McGavigan Ltd. is building a factory in China to meet what it said are demands for higher-quality, more visually appealing components like dashboards and entertainment center controls in the country's auto market.
The 51,000-square-foot facility, in Suzhou, China, will open in the third quarter with the full range of the company's capabilities, including injection molding, thermoforming, in-mold decorating, painting and assembly, said executives from the Glasgow-based company.
Commercial director Steve Mathers said the company is investing several-million pounds in the factory, and said it would employ between 150 and 200.
It will “almost exactly mirror” the company's Glasgow headquarters facility, which employs about 120, and it will include its own localized research and product development staff to tailor offerings for the local market, Mathers said in an interview at Chinaplas 2011, held May 17-20 in Guangzhou.
“Technology transfer is critical to the long-term success of the business,” he said, adding that the company plans to have a team specializing in technology transfer. “You can't make the assumption that what works in China is the same as in Europe and North America.”
The Scottish factory will retain more of the company's new process development capabilities, though, he said.
The Suzhou factory also will have what General Manager Lifeng Wang described as “one of the most advanced paint lines in Asia,” a highly automated, energy-efficient system.
Products planned for Suzhou include dials and appliqués, fascia assemblies and interior trim molded parts.
The company has customers in the appliances and telecommunications markets, but automotive is a major driver for the new investment, particularly Chinese automakers that want to improve their cars, Mathers said.
“When we first came here we were working with the global Tier 1 automotive companies,” Mathers said. “They remain steadfast customers but we are seeing an increasing independence of home brands as they want to draw their brands up the value chain.”
To help finance the new factory, McGavigan took on a minority investor in December, selling a 37.5 percent stake in the company to Glasgow-based investment house Maven Capital Partners, Mathers said.
The China facility represents a return of sorts to the local market for the company, which under a previous company structure built a plant in Shanghai in 2006.
At the time, the Scotland facility was part of private equity firm Riverlake Partners LLC of Portland, Ore., and its Advanced Decorative Systems unit, but the U.S. group fell into financial trouble when the American and European auto markets collapsed in 2008, and it sold the Shanghai facility.
Mathers and former Advanced Decorative CEO David Taylor bought the Scotland operations in 2009.