NEW YORK (Aug. 2, 10:40 a.m. ET) — Nypro Inc. is expanding its pharmaceutical packaging and health-care plant in Mebane, N.C., and adding a medical-device development and design center at its headquarters in Clinton, Mass.
Construction on the 90,000-square-foot expansion in Mebane is slated to begin this month, and the new portion of the plant will be operating by June 12, according to Ray Grupinski, group president of Nypro Healthcare. The expansion includes a 40,000-square-foot clean room. The Mebane plant currently has 113,000 square feet of space.
“The expansion is largely for our pharmaceutical packaging business,” Grupinski said. “Our opportunities there have been growing.” Currently, about half of the Mebane plant is used for pharmaceutical packaging, and the other half is used to make health-care devices and components.
Grupinski said the design center in Clinton, scheduled to open in February, will use existing space and be similar in size to its current design center in Dublin, Ireland.
In addition, he said Nypro is building a new design innovation center in Ireland that will open Jan 1, replacing the existing center.
“This will enhance our ability to win more business because development is so integrated with design,” Grupinski said. “OEMs aren't just outsourcing their manufacturing, they are now outsourcing parts of their research and development work, but retaining oversight” of those projects.
He said the center in Clinton will enable Nypro to use its engineering, automation and tooling expertise to reduce production development and manufacturing costs.
“When you develop the device from the ground up, you improve speed to market, you get improved manufacturability and you get reduced cost,” he said.
“”We're very bullish and expect to grow in the double-digits in 2011,” said Grupinski. Nypro is gaining market share in the medical sector because of three trends: the continued shift to outsourcing, the drive by OEMs to consolidate their global supplier footprint and the desire by OEMs to have suppliers with a presence in the three key regions worldwide, North America, Europe and Asia.
“Every one of our customers compete in two of those three regions and wants to get into the other,” Grupinski said. “And they are looking to reduce their number of suppliers to two, maybe three. They want one stop-shopping where they can get everything from design to end product handling and they want customers with geographic reach. We have the ability to manage projects for them from concept to product development.”
He also said OEMs are increasingly looking to their top suppliers for innovation and partnerships, and to help them cut costs.
“There is a lot more pressure on our customers to reduce costs, so our customers are much more open than ever to design modifications to take costs out of product,” Grupinski said. “A lot of customers are looking to our lean Six Sigma team to help them take costs out.
The latest expansions in the medical market come on top of other expansion efforts by Nypro in that market in the past year.
A 75,000-square-foot expansion at Nypro's Asheville, N.C., health-care plant, which makes injectable insulin pens, is near completion. That project will double the plant's clean room space.
And, in January, Nypro completed its acquisition of Schlosser Medizintechnik GmbH of Knittlingen, Germany, a supplier of medical plastic parts for diagnostic devices. Schlosser has a 169,000-square-foot factory with Class 7 and Class 8 clean rooms.
In addition, Nypro began using solar and wind power at its Mebane plant last month as part of an initiative to use more renewable energy and reduce its greenhouse gas emissions.
Nypro spent than $1 million to cover the building's 113,000-square-feet roof with solar panels and to build a wind farm with four wind turbines. The energy generated by the system will be provided to the local electric company and will, in turn, offset the cost of providing energy to at least six electric injection molding presses in the 200-ton range.
The Mebane project is part of a corporate initiative to have all of its packaging plants some day run on renewable energy sources.
Nypro had $1.3 billion sales in fiscal 2010, which ended June 30, with health care accounting for 30 percent of the company's revenues. That was a 14 percent increase over fiscal 2009.
In addition, its profit in fiscal 2010 before cost employee share option plan cost and taxes was $46.4 million, up 84 percent from 2009, and its earnings before interest, taxes, depreciation and amortization set a record high of $114 million.
In fiscal 2010, Nypro also reduced its net debt by $47 million to its lowest level since 2003, and, achieved an 11.1 percent return on assets, its highest level since 2002. Its net income was nearly $30 million, with $19.3 million attributable to Nypro Inc. compared with $6.8 million and $2.6 million, respectively, in fiscal 2009.