After a slew of expansions to add space, clean rooms and manufacturing capabilities, MedPlast Inc. executive Mike Farrell said the 3-year-old firm, with nearly $100 million in sales, will focus in the short-term on “shoring up” its infrastructure while keeping an eye on potential acquisitions.
“Business is good,” said Farrell, executive vice president of sales and marketing, in an interview at the Medical Design & Manufacturing East show, held June 7-9 in New York.
“We're ahead of where we thought we'd be. We are back to looking for acquisitions. We are looking for areas where we can expand in support of our customers, either domestically or offshore. We have a target for making an acquisition in the next 12 months.”
Currently, all five of the company's plants are in the U.S.
Farrell said MedPlast — created in 2008 through a number of acquisitions by longtime industry veteran and MedPlast CEO Harold Faig — will look for businesses that are complementary. Faig was president and CEO of medical manufacturer Tech Group Inc. for two years after retiring as president and chief operating officer of Milacron Inc. in 2003.
“We want something that brings in new technology, something that is additive to our skill sets, or something that is in a geography that would support our existing customer base,” he said.
“We are growing substantially in the medical surgery business,” he said. “We are also targeting the dental side of the business, and silicone extrusion/fabrication for markets such as balloon catheters and drainage devices. The pipeline is as strong as it's ever been.”
To help achieve that growth, Farrell said MedPlast needs to continue to build its staff and project-management capabilities.
“When you embark on new applications and new types of business, you have to have the infrastructure in place to support its success. We are continuing to grow the resources within the company,” Farrell said. “We have shored up the whole operating infrastructure of the company, upgraded our talent level, brought in operating guys, expanded our value-added offerings, upgraded our clean rooms and brought in veteran sales guys who understand the business.”
He said MedPlast will continue to upgrade its five plants.
“We will continue to expand, add more value-added capacities and more clean room capacities, and convert existing white rooms in our plants into clean rooms as the need arises,” Farrell said.
An example: MedPlast is transforming non-clean-room space into a clean room at its plant in Elkhorn, Wis., which is bringing silicone extrusion capacity on line.
That new capacity will complement the elastomeric molding, rubber injection molding, silicone injection molding, thermoplastic and overmolding capabilities at that plant and improve turnaround.
“It will streamline the time involved because we won't have to source that work somewhere else,” said Dan Winter, MedPlast's development director for elastomers.
That meshes with the approach the company has used to build its business since it was formed in 2008.
MedPlast also added extrusion blow molding at its headquarters plant in Tempe, Ariz., in April, just two months after it put in place a Class 100,000 clean room for Class 8 medical devices — the second clean room at that plant.
And last September, MedPlast completed the conversion of 6,000 square feet of white room space at its West Berlin, N.J., plant into a Class 100,000 clean room that will have room for 12-14 injection presses. That boosted clean room space in there to 60,000 square feet.
Critically, the company also said it has corrected all but one of the safety issues raised in a recent citation issued at the West Berlin plant by the Occupational Safety and Health Administration.
Except for one machine with an excessive noise level, everything has been addressed, said Robert Piccoli, general manager of MedPlast West Berlin. “The one open issue relates to lowering the decibel level related to a brand-new piece of equipment and MedPlast is working with the machine manufacturer to remediate this issue — a process that should be completed shortly.”
Following a March 17 inspection of the plant, OSHA cited the West Berlin facilities for 17 serious and nine other violations with total proposed penalties of $72,000. The violations included failures to ensure that exits were unblocked, areas of improper training, lack of written lockout/tag-out procedures and approved eye protection devices, inadequate machine guarding, and failure to conduct adequate inspections of powered industrial equipment and hoist chains.
Since it was formed, MedPlast has boosted its medical business to 85 percent of sales, from 70 percent. It started with 130 injection molding and elastomer molding presses and has raised that number to 220. The machines have clamping forces of 28-1,000 tons.
MedPlast focuses on hand-held, single-use surgical instruments and diagnostic devices geared to its capabilities in rubber, plastic and silicone — as well as overmolding, two-shot and thermoplastic molding.
“We are still small and nimble enough to keep our arms around the business,” Farrell said. “We're quick on our feet and quick enough to realize when we need additional resources.”
While the company's sales are up 15 percent so far this year, Farrell noted that many of its customers are “in a wait-and-see mode to see what happens with medical reform.”
“Everybody is waiting, but it is not impacting our business yet because medical is less impacted by the sluggish economy,” Farrell said. “We've upped the bar and we're having a good year.”
“We have been aggressive and attacking the market and working to move up the ladder,” said John Rugari, vice president of business development. “We've been expanding our capabilities because having a single capability is not enough to meet the demands of health-care OEMs.”
Farrell agreed. “Gone are the days where you are just going to mold everything. It is all about putting in value for your customers.”