Reshoring prompts $6M investment in machines, people at Thomson Plastics

Thomson Plastics Inc. will invest about $6 million over the next year to expand capacity for large-tonnage injection molding for customers reshoring production from Asia and Canada.

"Freight logistics has always been an issue but … when you're dealing with large components, you're shipping as much air as you are plastic," Steve Dyer, president and CEO of TPI, told Plastics News. "Because plastic doesn't weigh much, you always cube out on a truck before you weigh out. So location and logistics are even more critical."

As many of TPI's core customers reshore work from Asia, some are relocating regional work from Canada, Dyer said.

"We're in the process of bringing those molds, which are going to save them millions of dollars in freight," he said.

The company is using $3.5 million of its investment to retool its headquarters plant in Thomson, Ga., where it plans to hire about 30-40 new workers.

It also ordered new machines for its Lexington, N.C., plant, where it will hire 15 new workers.

TPI's Duncan, S.C. plant, which it purchased last fall, will hire about 20 new workers to meet demand, Dyer said.

Amid a continued worker shortage, Dyer said TPI is offering competitive wages and showing appreciation for its employees.

"People like me are unnecessary overheads," he said. "The value is added at the machine and we want our teammates to feel that important because they are to us.

"As we're all struggling to find people … we have to do the type of work that creates margins that allow you to pay [sustainable wages]," Dyer added.

TPI has also seen new business in the packaging and clean energy markets as companies reshore large component manufacturing.

"We are working with an Asian supplier of large returnable packaging," Dyer said. "The packaging contains proprietary IP that allows tracking of the individual containers. It was cost prohibitive to manufacture the entire unit in Asia and ship to the U.S."

TPI's customer will make the smaller IP components in Asia and ship them to the U.S. where TPI will mold the large-tonnage components and assemble them for distribution in North America, he said.

The company is also working with a large solar array manufacturer on the West Coast.

"It was cost prohibitive to ship the large array pedestals used to mount the solar panels all the way across country for East Coast-based projects," Dyer said, adding that the components require 3,000 tons of injection pressure. "We are tooling the base so that we can manufacture and distribute all the large plastic components for projects east of the Mississippi River.

"People are realizing that this inflation is not transitory; it's going to be with us for a protracted period," he said. "We're getting ready to go into a period of recession, but with that, it's going to cause some portions of the supply chain simply to catch their breath. But as we come into the recession there's going to be a new paradigm."

Dyer said he expects freight and other costs to lower over the next three-to-five years, but remain elevated compared to what they've been historically.

"Asia is building for the Asian market now," he said. "They've got a bigger middle class there than they can ever service. Their primary focus is no longer to service our markets. They want to be here … but they've got their own markets to serve now and they're not going to give their services away.

"The cost difference between the two places, coupled with the increased freight logistic cost, is going to make American manufacturing very cost effective," Dyer said.

OEMs are "not going to allow themselves to be caught in the situation they were two years ago of not having product to supply," he said. "Best case scenario, they're going to reshore very close to their assembly operations. Worst case, they're going to dual source so they have the capability to always have some supply of product."