(From the July 25, 2011, issue of Rubber & Plastics News)
NEW YORK—After a slew of expansions that added space, clean rooms and manufacturing capabilities, MedPlast Inc. in the short term will now look to shore up its infrastructure while keeping an eye on potential acquisitions.
MedPlast Inc. executive Mike Farrell said business is good at the 3-year-old, nearly $100 million Tempe, Ariz.-based company.
“We're ahead of where we thought we'd be,” he said at the Medical Design & Manufacturing East show, held recently in New York. “We are back to looking for acquisitions. We are looking for areas where we can expand in support of our customers, either domestically or offshore. We have a target for making an acquisition in the next 12 months.”
Currently, all five of the company's plants are in the U.S.
Farrell said MedPlast—created in 2008 through a number of acquisitions by longtime industry veteran and MedPlast CEO Harold Faig—will look for businesses that are complementary. Faig was president and CEO of medical manufacturer Tech Group Inc. for two years after retiring as president and chief operating officer of Milacron Inc. in 2003.
“We want something that brings in new technology, something that is additive to our skill sets, or something that is in a geography that would support our existing customer base,” Farrell said. “We are growing substantially in the medical surgery business. We are also targeting the dental side of the business, and silicone extrusion /fabrication for markets such as balloon catheters and drainage devices. The pipe¼line is as strong as it's ever been.”
To help achieve that growth, Farrell said MedPlast needs to continue to build “talent and project management capabilities to handle the increased level of business. When you embark on new applications and new types of business, you have to have the infrastructure in place to support its success.
“We are continuing to grow the resources within the company. We have shored up the whole operating infrastructure of the company, upgraded our talent level, brought in operating guys, expanded our value-added offerings, upgraded our clean rooms and brought in veteran sales guys who understand the business.”
He said the custom molder, which gets 85 percent of its sales from medical products, will continue to expand the capabilities and space at its five plants.
“We will continue to expand, add more value-added capacities and more clean room capacities, and convert existing white rooms in our plants into clean rooms as the need arises,” Farrell said.
For example, MedPlast plans to transform non-clean room space into clean room space at its plant in Elkhorn, Wis., and will add silicone extrusion capacity in the near future.
That new capacity will complement the existing elastomeric molding, rubber injection molding, silicone injection molding, thermoplastic and overmolding capabilities at the plant, and enable the facility to turn products and projects around more quickly.
“It will streamline the time involved because we won't have to source that work somewhere else,” said Dan Winter, MedPlast's director of development for elastomers.
That meshes with the approach the company has used to build its business since it was formed in 2008.
In addition to the new silicone extrusion operation in Elkhorn, MedPlast added extrusion blow molding capabilities to its headquarters plant in Tempe in April, just two months after it put in place a Class 100,000 clean room for Class 8 medical devices at the plant, the second clean room there.
In September 2010, MedPlast completed the conversion of 6,000 square feet of white room space at its West Berlin, N.J., plant into a Class 100,000 clean room that will have room for 12-14 injection presses. That boosted clean room space in West Berlin to 60,000 square feet.
OSHA violations addressed
Critically, the company also said that it has addressed and already corrected all but one of the safety issues raised in a recent citation issued to the West Berlin facility by the Occupational Safety and Health Administration.
Except for one machine with an excessive noise level, everything has “already been remediated,” said Robert Piccoli, general manager of MedPlast West Berlin. “The one open issue relates to lowering the decibel level related to a brand new piece of equipment, and MedPlast is working with the machine manufacturer to remediate this issue—a process that should be completed shortly.
“We hold all OSHA requirements in the highest regard and with great respect, thus ... our prompt and quick response.”
Following a March 17 inspection of the plant, OSHA cited the West Berlin facility for 17 serious and nine other violations with proposed penalties of $72,000.
The violations included failures to ensure that exits were unblocked, areas of improper training, lack of written lockout/tagout procedures and approved eye protection devices, inadequate machine guarding, and failure to conduct adequate inspections of powered industrial equipment and hoist chains.
Since it was formed, MedPlast—which employs about 800—has boosted its medical business to 70-85 percent of sales, and increased the number of its injection molding and elastomer molding presses, which range in size from 28 to 1,000 tons, from 130 to 220.
MedPlast focuses on hand-held, single-use surgical instruments and diagnostic devices geared to its capabilities in rubber, plastic and silicone, as well as overmolding, two-shot and thermoplastic molding. Its five plants have roughly 375,000 square feet of space. Its other facilities are in Monticello, Iowa, and Westfield, Pa.
“We are still small and nimble enough to keep our arms around the business,” Farrell said. “We're quick on our feet and quick enough to realize when we need additional resources.”
While the company's sales are up 15 percent so far this year, Farrell noted that many of its customers are “in a wait-and-see mode to see what happens with medical reform.”
“Everybody is waiting, but it is not impacting our business yet because medical is less impacted by the sluggish economy,” he said. “We've upped the bar and we're having a good year.”
“We have been aggressive and attacking the market and working to move up the ladder,” said John Rugari, vice president of business development. “We've been expanding our capabilities because having a single capability is not enough to meet the demands of health care OEMs.”
Farrell agreed: “Gone are the days where you are just going to mold everything. It is all about putting in value for your customers.”