Husky Injection Molding Systems Ltd. is investing at least US$50 million in a new plant in China, to meet growing demand for its beverage packaging and hot-runner systems there.
In its first phase of operation, the new Suzhou facility will make large plates for packaging and hot-runner systems produced at the firm's Shanghai regional headquarters and manufacturing plant, where it is running out of space. The Suzhou plant is scheduled to begin operating in mid-2014.
“There's no room in Shanghai to continue to expand,” said David Matts, Shanghai-based general manager of Asia-Pacific operations. “This will be mainly a feeder facility.”
Bolton, Ontario-based Husky said July 4 that it has signed an investment agreement with the Suzhou government for about 13 acres of land in the Suzhou New District. In a July 4 news release Husky said there is “significant opportunity for further expansion beyond the existing land area.”
Matts said the plant will be fully built in several phases over four to five years, and the firm is still evaluating the potential range of products. But he said it will be primarily a machining operation.
The initial investment will be between $50 million and $100 million.
The “lion's share” of what the company makes in China is for the Chinese market, though some of it is exported to other countries in Asia Pacific, Matts said.
The plates Husky will manufacture in Suzhou are currently imported from the firm's other facilities around the world. Suzhou will help it 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,” President and CEO John Galt said in the release.
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 does manufacturing in Canada, the U.S., Luxembourg and Austria.