PHILADELPHIA—MedPlast Inc.'s acquisition of fellow contract manufacturer United Plastics Group Inc. is a marriage where the sum is clearly greater than the parts, according to MedPlast Executive Vice President Matt Langton.
“This is one of those cases where you add one and one and get something greater than two,” Langton—a former UPG executive—said in the company's first discussion of the merger since it occurred three months ago. “They had advantages on the processing side. We had capabilities [and facilities] in China and in Tijuana. There is very little overlap in capabilities, and very few customers and geographies where we overlap.”
The merger created a contract manufacturer with 15 plants worldwide and sales of $250 million—roughly 65-70 percent of them in medical. The companies are “better together” than they were separately, Langton said.
“I think we came out of it with the best possible outcome for both organizations. We are such complementary organizations to each other that it gives us a good value we can give to all our customers. We have complementary technologies, complementary capabilities,” he said in a late-May interview at the Medical Design & Manufacturing East show in Philadelphia.
“The customers of UPG now have access to a whole host of capabilities that UPG didn't have before, and the customers of MedPlast now have access to UPG capabilities and resources in China and Mexico.”
A case in point: Prior to the acquisition, all five of MedPlast's plants were in the U.S. UPG brings 10 more plants to the mix — four in Suzhou, China; four in the U.S., one in Mexico and another in Wales. Combined, MedPlast now has 900,000 square feet of manufacturing space, including 175,000 square feet in China.
Complementary technologies have given four-year-old MedPlast, based in Tempe, Ariz., the ability to be more of a one-stop supplier to the medical market and other industries the two companies individually served.
UPG's expertise in partial- and full-assembly, contract sterilization, lab services and global supply chain logistics management adds another dimension to the MedPlast's breadth of molding capabilities, which includes injection molding, blow molding, compression and transfer molding, liquid injection molding, two-shot and multicomponent molding, silicone extrusion and precision mold making.
“With us, you can consolidate your supply chain,” Langton said. “We can do plastics parts, full assembly, subassembly, provide finished goods and can offer our customers low-cost production in Tijuana. We are one of the leaders in blow molding, extrusion and in injection molding. And if you need multishot, we've got that, too, as well as a dedicated thermoset elastomer facility.”
Langton said the transition into a single company has been smooth. “We have done a pretty good job in making the transition rapidly and seamlessly so that we can get into the markets and tap into new opportunities,” he said.
“We are moving quickly to add new customers who can take advantage of the pooled capabilities we now offer. We are visiting all major customers and also communicating with them via email and phone.”
Langton said MedPlast expects to increase business with existing customers, as well as bring in new business from customers looking for a supplier that can provide value-added and finished products.
He added that the merger “should accelerate our sales outside North America.”
“Within a week of the merger, we had MedPlast customers visit UPG plants in China” said Langton, who, prior to the merger, had called those China manufacturing capabilities UPG's “shining star,” as they accounted for one-third of UPG's overall sales and 50 percent of its medical business.”
“We expect to grow at a brisk clip globally,” he said. “We are seeing good double-digit growth in our Tijuana location and in China, and those areas are growing faster than our North American facilities. But even in North America, we are growing at between 3 and 5 percent.
“With the scale we now have, we are able to be more flexible about what we can do, and where we can do it. We have more resources and more leverage in what we can do both from a purchasing and operating standpoint.”
Langton said he is excited about the company's “go-forward plan.”
“I see the value we can offer our customers. I do believe that in this case bigger is better.”
With the UPG acquisition, MedPlast now has more than 520 presses, with clamping forces from 24-1,000 tons.