SHANGHAI—Swedish injection molder Nolato A.B. is building a dedicated medical manufacturing plant in China with capacity for 30 injection machines, as it sees its customers in the medical and pharmaceutical industries expanding their operations in Asia.
The new facility, located near the company's existing manufacturing plant in Beijing, will begin operation in the first quarter of next year, said Strategic Account Manager Johan Christiansson, in an interview at the Medtec China trade show on Sept. 25 in Shanghai.
The Torekov, Sweden-based company said the new 23,700-sq.-ft. factory will have 8,600 square feet of class 8 clean room space.
"China is the fastest growing market for pharmaceuticals and medical devices, which means that more and more of our customers are discussing expanded production in China for the Asian market," said Christer Wahlquist, president of the Nolato Medical business unit, in a statement.
The new facility will let the company separate its medical and telecom related manufacturing at its existing Beijing plant, which opened in 1999, Christiansson said. The old Beijing facility will focus entirely on telecom related work, as the company tries to expand its medical-related business, he said.
"The focus going forward is … more and more on medical," he said. "Telecom goes up and down very fast. Medical is more stable."
He said it made sense to separate the businesses.
"If you combine medical with something else, there can be challenges," he said. "So to make sure we have the best conditions to manage this, we decided to have a dedicated medical site."
The company has a telecom manufacturing facility in Shenzhen, China.
Christiansson said the plant will not run at full capacity from the start. "We're building a little more for the future as well."
Nolato said its medical business has been active in China since 2008. Globally, he said the company has about 270,000 square feet of clean room capacity for medical manufacturing, in a range of classes, at nine facilities in Asia, Europe and North America.
Nolato's medical business worldwide has nearly 1,000 employees in Sweden, Great Britain, Hungary, the U.S. and China.
The publicly traded company reported in July that its second quarter medical business worldwide rose 3 percent to $50.2 million, while overall sales rose 11 percent, to $180.9 million, with operating income up 37 percent to $17.2 million.
That sales increase was led by its telecom business, where sales in the quarter rose 28 percent, to $84.1 million.