Vertical integration pays off for Wisconsin-based MGS Mfg. Group Inc.

MGS Mfg. Group Inc.'s timing has proven to be critically important in the fight against COVID-19.

A year ago, the injection molder and toolmaker decided to invest $20 million to build a Healthcare Center for Excellence at its Germantown, Wis., headquarters. The project included a 13,000-square-foot clean room, 20 injection molding machines, automated assembly cells and auxiliary equipment.

Officials didn't know at the time how the project would play an essential role in suppling plastic components for COVID-19 tests. Or that the expansion would quickly reach capacity and that the molder would have to expand again, this time even faster.

"I think we all know, back in March and April [the United States] was woefully unprepared," President Paul Manley said in a telephone interview. "Without testing capability … everything shut down. Our focus was on our diagnostic customers. How do we scale up?

"We had just completed an ISO Class 8 clean room to start production on those products. Today that clean room is completely full. We have full-scale production on 12 machines, complete with automation, running 24/7," Manley said.

To meet U.S. demand for COVID-19 tests, MGS scaled initial production nearly thirtyfold. That meant building high-cavitation tools, bringing in more multishot molding capacity and quickly getting the work cells qualified and churning out parts.

Having extensive experience in the medical market proved to be invaluable.

"We have been positioning MGS for the better part of a decade now to provide solutions to the health care industry," Manley said. Company officials felt their experience with molding, automation and making high-end injection tooling made the medical market a good fit.

Having everything under one roof also helped, especially as travel became difficult.

"Having all that capability allowed us to really react quickly. It allows us to compress lead time. In this case, we were able to scale production faster than most anyone," Manley said.

After getting the initial diagnostic molding projects underway in the brand-new clean room, MGS officials turned to another major medical project: making components for rapid testing kits. In early May, MGS was awarded a contract that meant 18 new tools, half of them multishot molds. The customer needed them in production within four months. MGS handled all the downstream automation and inspection, too.

So just weeks after opening its new clean room molding area, MGS basically had to duplicate the project.

"We built all the molds in 10-12 weeks, and we constructed another 7,000-square-foot Class 8 clean room. Just a couple of months after we finished one, we had to fast-track another one. It's just unheard of," Manley said.

By August, MGS started molding validation, and commercial production started in October.

"We installed 13 new molding machines, eight of those were multishot. We also built our own injection units and rotary turntables. It's incredible. I hope the team is as proud of what they've done as I am," Manley said.

"We took no shortcuts. It really shows what we're capable of at MGS," he said.

Here's another example: Early on during the pandemic, when automotive customers temporarily shut down, MGS worked on the well-known Ventec Life Systems project with General Motors to make 30,000 ventilators.

"We built a mold for a critical component for Ventec. We were tasked with building a mold in a week. Not a simple mold, this had moving parts; they wanted to replace a metal part," Manley said.

"We worked literally around the clock, on split shifts, in order to finish the mold in six days."

When U.S. businesses started shutting down in March because of COVID-19, MGS put comprehensive safety protocols in place. One key has been testing and contract tracing — especially given that Wisconsin has been a virus hot spot.

In six months, 26 MGS employees have tested positive for the coronavirus. But thanks to the protocols, they did not spread COVID to others, and MGS was able to stay open and keep producing critical parts.

"What we're most proud of is there's no evidence to support occupational spread," Manley said.

He's also proud of how everyone at the company responded to the pandemic.

"Our team has been incredible through all of the challenges that this pandemic has presented to us, our workers, and to our families," Manley said. "They're working 60-70 hours a week. They jumped at the opportunity.

"I can't take a whole lot of credit for the amount of enthusiasm. They were excited to do their part to make sure that we had the much-needed testing components to help contain the virus," he said.

In the last five years, Manley estimates MGS has spent $50 million on its flagship plant in Germantown. And the investment isn't finished. On Oct. 14, the company announced it had broken ground on a 121,000-square-foot warehouse, at a cost of $10 million, that will bring the total size of the headquarters campus to 380,000 square feet. And a second 118,000-square-foot expansion is slated to begin in 2022.

The new warehouse will replace rented space in Oak Creek, Wis., which is about 35 miles from Germantown. The second phase, which will cost another $15 million, will consolidate more operations in Germantown. Manley said that will drive more collaboration and improve speed to market.

Manley said business has been strong, especially in health care, and MGS expects to post double-digit growth in 2021.

About 70 percent of MGS' sales are from medical customers, with the remainder generated from automotive and precision industrial markets. Manley emphasized that nonmedical markets remain very important.

"We just finished our fiscal year, and 2020 was a great year. But it wasn't without its challenges," Manley said. "I'm extremely bullish on 2021 and 2022. … I see great growth in 2021 and beyond."

MGS has 1,300 employees at six manufacturing facilities around the world. Plastics News ranks the company at No. 48 among North American injection molders with molding sales of $200 million and No. 19 among mold makers, with tooling sales of $50 million.

The company has been owned by Milwaukee-based private equity firm Mason Wells since 2016.