GUANGZHOU, CHINA — Gaudlitz GmbH, a German injection molding known mostly for its work as a Tier 2 auto supplier, is actively looking to enter the medical plastics sector, said CEO Lucas Galuppo, in an interview with Plastics News on the sidelines of a Medical Plastics Conference in Guangzhou.
Currently, he said, the company is 95 percent focused on the automotive sector, with only 5 percent invested in medical plastics. But looking forward, the Coburg, Germany-based company wants to even out that product mix.
“We are in two markets that are growing above the GDP,” he said. “We don't want to be too dependent on automotive.”
Within five years, he said, the company plans to achieve 33 percent of its sales from automotive, 33 percent from medical and 33 percent from industrial customers.
“We are increasing the independent function of each of our business units,” he said. The entry strategy will be finalized within the following few months, he said.
The company has plans to expand its Wuxi, China, site, and Galuppo said that project will take place within five years. The plant and future expansion will manufacture products for all three business units.
“In terms of business units they are separated but in terms of production and process there are synergies so we put them all together,” he said. “If you want to make synergies in terms of cost you need to put all three industries in the same facility.”
In the near term, the company is in discussions with a local toolmaker specializing in the medical sector about a joint venture. The companies are still negotiating, but Galuppo expects the JV to be implemented within two years.
Galuppo said the company is expanding its sales force across China, and will soon test the market for medical plastics, initially with German-made products for about a six-month period. Eventually, he said, “what we want to do is bring our patents here, something only we can do, and only by doing that can we increase our market share in the industry.”
Galuppo said currently most of their clients in the automotive market are German. He acknowledged that entering the Chinese medical plastics market will be a wholly different challenge.
“It's a challenge but it is also an opportunity. We are only willing to invest because the market is growing,” he said.
Gaudlitz has achieved healthy growth over its 10 years in China and Galuppo expects that will continue.
“In the last 10 years we've grown 20-30 percent each year,” he said. “And the expectation is for a continued 20 percent [growth] for the next five years as well.”