SHANGHAI (Sept. 9, 12:25 p.m. ET) — German medical injection molder Gerresheimer Regensburg GmbH will increase capacity in its China facility four-fold in the next 18 months, and is actively planning for a second factory in the country.
The expansion of its Dongguan, Guangdong province, facility is driven by multinational medical device makers that want to reduce product costs and are becoming more comfortable putting sensitive health care manufacturing in China, said Stephane Pianigiani, managing director of Gerresheimer Medical Plastics Systems Dongguan Co. Ltd.
The Regensburg, Germany-based firm plans to go from eight injection molding machines to 30, and from 100 employees to 350, in Dongguan by the end of 2012, he said in an interview at the Medtec China trade show, held Sept. 7-8 in Shanghai.
“There's always been reluctance [of their customers in the medical device industry] to come to China, but that is changing,” Pianigiani said.
Dongguan is the first part of a planned China expansion for Gerresheimer, which is a major producer of drug delivery systems like inhalers.
The company is also actively looking for either another greenfield manufacturing site in the country or another medically-oriented injection molding factory to buy, Pianigiani said.
“In the medium to long-term we will not be a leader in China with only one plant in Dongguan,” he said. “By January 2013, we will have another plant running.”
Ideally, Pianigiani said the company would make a “quick acquisition” of another factory but he said it is proving difficult to find a suitable candidate.
Globally the company has 15 injection molding plants, with eight focused on medical devices. Its customer base includes most of the major medical and pharmaceutical companies, including Zogenix, Becton Dickinson, Novartis and Merck.
The company makes about 100 million inhalers per year worldwide, and more than 50 percent of its total cleanroom capacity in its plastics division is used for drug delivery systems like powder and capsule inhalers and nebulizers. It also makes devices such as disposables for dialysis treatment, insulin pens, surgical devices and lab test equipment for doctors' offices.
It opened the Dongguan facility five years ago, and is now seeing its development work with customers coming to fruition, he said.
“[Globally] we are a full service provider,” he said. “Customers come to us with the idea and we design and manufacture, including all the molds and tools.”
More than 95 percent of the products made in Dongguan are exported to North America and Europe, but the company was exhibiting at the Medtec China show in part to try to boost business in China's domestic market, he said.
“We definitely see opportunity with the size of the population and the portion of the population that can afford that product,” he said.