CHICAGO (Sept. 9, 12:40 p.m. ET) — Methode Electronics Inc. has bought an injection molding plant in Monterrey, Mexico, from Nypro Inc. for an undisclosed sum.
Chicago-based Methode — a global technology and manufacturing firm — will operate the plant as part of its existing Monterrey site under the name of Advanced Molding and Decorations SA de CV. The plant employs 228 and operates 52 injection molding machines, three paint lines and several pad-print machines. In addition to injection molding, the plant performs painting and decorating work.
Current Nypro customer contracts will transfer to Methode, along with the plant's assets, officials said in a Sept. 9 news release. Buying the plant will save Methode $8 million when compared to the cost of opening a greenfield site.
Methode also plans to invest $7.5 million at the plant “to complete the vertical integration process,” officials said.
The plant is expected to generate sales of between $20 million and $25 million in its first year after the acquisition.
In the release, Methode President and CEO Donald Duda said his firm has been experiencing “significant quality and delivery issues” with suppliers over a paint process used in producing automotive center consoles. Doing the work in-house should resolve those issues.
“We believe the vertical integration of a portion of these processes will be the best solution to provide our customers with better and more consistent quality,” Duda said.
Clinton, Mass.-based Nypro, a global leader in injection molding, is selling the plant because “the level of business for us there was not moving,” spokesman Al Cotton said in a Sept. 9 phone interview.
“We knew [Methode], and this was a good opportunity for us to keep the employees working,” he said.
Nypro made parts for consumer and electronics markets at the Monterrey plant. Methode, which makes a variety of electro-mechanical devices, plans to shift the site over to automotive work as well. Officials with the firm could not be reached for further comment.
In 2009, Nypro sold a plant in Chihuahua, Mexico, to Fortis Plastics LLC. Cotton said that and the sale of the Monterrey plant are unrelated, since the plants did work for different industries. Nypro still operates plants in Guadalajara, Ciudad Juárez and Tijuana, Mexico — with its operations in Tijuana in particular enjoying solid growth, he added.
Worldwide, Nypro employs more than 17,000 at more than 40 sites. The firm has annual sales of about $1.1 billion. Nypro ranked as North America's sixth-largest injection molder in a recent Plastics News ranking with related sales of $657 million.
Methode posted sales of $440 million in its most recent fiscal year, which ended April 30. The firm employs 2,900 at more than 20 global sites.