SHANGHAI (July 4, 9:50 a.m. ET) — Husky Injection Molding Systems Ltd. said July 4 that it is investing at least US$50 million (317.5 million Chinese yuan) in a new facility in China to meet growing demand for its beverage packaging and hot runner systems there.
The Bolton, Ontario-based company said the new facility in Suzhou, Jiangsu province, would in its first phase of operation make large plates for its packaging and hot runner systems produced at its Shanghai regional headquarters and manufacturing plant, where it is running out of space.
"There's no room in Shanghai to continue to expand," said David Matts, the Shanghai-based general manager of Asia-Pacific operations. "This will be mainly a feeder facility."
The company has signed an investment agreement with the government in Suzhou for 53,000 square meters (80 Chinese mu) of land in the Suzhou New District, and said in a July 4 statement that there is "significant opportunity for further expansion beyond the existing land area."
The first phase is scheduled to open in mid-2014.
Matts said the facility will be fully built out in several phases lasting four to five years, and the company is still evaluating the potential range of products, although he said it will be primarily a machining operation.
The "lion's share" of what the company makes in China is for the China market, although some of it is exported to other countries in Asia-Pacific, Matts said.
He said the first phase investment will be between US$50 million (317.5 million Chinese yuan) and US$100 million (635 million Chinese yuan).
The plates it will manufacture in Suzhou are currently imported from other Husky facilities around the world. Suzhou will help the company cut lead times and respond to customers faster, Matts said.
"[A] strong increase in demand for plastics in the region has helped fuel customer growth," said John Galt, president and CEO, in the statement.
Matts said growth in China is outpacing other areas of the world for Husky.
"One of the elements of our strategy is a 'follow the customer' strategy," he said. "We want to be in the countries where our customers are."
The company has made other investments in China recently, opening another hot runner manufacturing facility in Shanghai in December, Matts said.
Since it started operations in China in 2004, the company said it has doubled its footprint and more than tripled its regional workforce.
Husky also has manufacturing facilities in Canada, the United States, Luxembourg and Austria.