Anaheim, Calif. — Sweden-based Trelleborg AB is expanding with the acquisition of Australian and Chinese silicone and plastic injection molder Baron Group for $300 million. The deal includes Baron's headquarters facility and two manufacturing locations in Australia and two additional facilities in China.
Trelleborg is also investing $21 million to build a 107,000-square-foot health care and medical facility in Grecia, Costa Rica, to support local medical customers in the region. The plant, Trelleborg's first in the region, will feature clean room production, liquid silicone rubber molding, thermoplastic molding, silicone injection molding and finished device assembly, Don Bonitati, director of healthcare and medical at Trelleborg, told Plastics News at MD&M West Feb. 5-9 in Anaheim.
Trelleborg's customers are looking to "reduce their current supply base," Bonitati said.
In order to leverage consolidation of supply chains, he said, the company plans to move closer to its global customers. Currently, Trelleborg ships its products from North America to its Costa Rica customers, most of which have facilities at the same site Trelleborg's new plant will be built, Bonitati said.
The facility, located near a port and an international airport, is expected to be operational in 2025.
"Costa Rica has evolved into a medical technology hub in Central America, and the facility, therefore, represents an important step in both increasing our capacity and broadening our geographical footprint in health care and medical," Peter Nilsson, Trelleborg president and CEO, said in a news release.
The facility is being built for customers with global sales, and the capacity it will add will also benefit Baron Group, the Australian-Chinese company it recently acquired.
"We knew the best way for us to [grow] in a timely manner" was through a merger or acquisition, Bonitati told PN. "This really solidifies our foothold there and expanding in [the medical] market."
"The acquisition of Baron Group marks a significant milestone in our ambition to build a comprehensive and complete health care and medical offering," Nilsson said. "The company's complementary culture and similar working methods make Baron Group an excellent addition to Trelleborg's existing offerings. We are convinced that this partnership will generate significant sales."
Baron Group had sales of about $95 million last year "with a margin well in line with that of the Trelleborg Sealing Solutions business area," the release said.
Trelleborg, which is based in Trelleborg, a city on the southern tip of Sweden, has seen an increase in demand for active pharmaceutical and biopharmaceutical manufacturing components, including ophthalmology, cancer treatment and now generic drug markets, Bonitati said.
"As we're seeing more and more patents expire from big pharma companies, there's another tier of players coming up with a generic version of medications," he said. "We can help them get that product to market."
The company is also expanding milling and extrusion capacity at its Northborough, Mass.-based facility clean room space by 25,000 square feet to meet demand for single-use disposable components like tubing, hosing, probe assembly, chromatography columns and sterile connectors for the biopharma market.
The single-use components are better for the environment than chemicals used to clean reusable equipment, Bonitati said, which are harder to dispose of and have a longer life expectancy to break down."