Medical growth spurs Saint-Gobain expansion

PHILADELPHIA—Saint-Gobain S.A.'s Performance Plastics division is expanding its manufacturing facility in Portage, Wis., with an $11 million investment that will create 42 jobs.

The firm said the project is expected to be complete in mid-2016 and will add 48,000 square feet of manufacturing and warehousing space, in addition to upgrading the current facility. It is the fourth expansion to the facility since it opened in 2001. The last expansion was in 2003.

Speaking at Saint-Gobain's Future Sensations event in Philadelphia on June 1, Performance Plastics President Thomas Kinisky said the firm sees medical as an industry primed for further growth, especially in the area of high purity components—which is the area of focus at Portage.

The Portage facility produces medical devices for ophthalmic, IV therapy systems and other fluid delivery applications in surgeries using primarily injection molding with some extrusion in medical grade clean rooms. Portage also houses the firm's precision micro-molding and its two shot thermoplastic/silicone molding capability, Kinisky said.

“The expansion is driven by our growth. We have the need to grow, and we have the need to add space,” the executive said.

“There are a lot of people that moved into contract manufacturing for medical devices, and there are people who came out of automotive and into medical following the growth. But frankly there's a question of validation or having infrastructure to do medical components. For us, we have that infrastructure, and the market has been growing at almost double digits for us.”

The Wisconsin Economic Development Corp. will provide Saint-Gobain with as much as $700,000 in state tax credits for the next three years, contingent upon the number of jobs created and amount of capital investment during that time, according to a release from Gov. Scott Walker's office.

The Portage site currently employs 300 and will add at least 42 jobs through the expansion, but Kinisky said the firm hopes the final number is close to 100 as the expansion is fully occupied during the course of the next three years.

“We built it so we could build the clean rooms in phases,” Kinisky said. “The first part of the project will have two new clean rooms, and we have additional space for two more.”

Kinisky said Performance Plastics is one of the faster growing divisions within Saint-Gobain's Innovative Materials sector—which accounted for about 22 percent of the group's $55 billion sales in 2014. From 2008-14, Performance Plastics has experienced an average annual growth rate of 7.5 percent, according to the executive, and it is in the middle of making a number of investments worldwide.

The firm agreed to collaborate with Argos Therapeutics Inc. on a new manufacturing facility to design, integrate and scale production of a range of disposables for use in cancer research. The division is also in the middle of expanding facilities in New York, Germany and France, and it recently opened a new facility in Indonesia for its bearings business, all within the last fiscal year.

John Crowe, CEO of Saint-Gobain Corp., the firm's North American unit, said at Future Sensations that Saint-Gobain has invested $3 billion in North America during the past five years. The firm employs about 15,000 at 250 locations in North America, with the region reporting sales of about $6.2 billion in 2014.

North America is the largest region for Performance Plastics, accounting for 48 percent of the division's sales. Europe accounts for 25 percent of sales, Asia 23 percent and South America 4 percent. The division operates 57 manufacturing sites in 17 countries with 6,000 employees.

Kinisky said about 30 percent of Performance Plastics' sales comes from elastomeric materials such as silicone, thermoplastic elastomers, thermoplastic urethanes and other rubbers. The business consists of three units—Fluid Systems, Composites and Engineered Components.

“We've been getting a lot of support from the group Saint-Gobain as far as capital for acquisitions as well as for expansion,” Kinisky said. “We're getting a lot of attention right now because our markets are growing. And with that growth comes investment. Clearly there is a priority that's being placed on the expansion of the plastics business inside of Saint-Gobain.”

Kinisky said Performance Plastics focuses on the aerospace, automotive, oil and gas, health care, life sciences and industrial. Kinisky said the fastest growing areas have been in bio pharmaceutical, medical, automotive and aerospace. He also identified food and beverage as an industry also demanding high purity, which could bring some growth for the unit.

“Recently we developed a new tubing where proteins don't stick to the inside surface of the tubing,” Kinisky said. “So if you have dairy or milk products, they won't foul the tubing. The tubing stays clean, and there is no buildup on the inside.”

Saint-Gobain is on track to relocate its North American headquarters, currently located in Valley Forge, Pa., to a new 65-acre campus in Malvern, Pa. The bigger campus will bring about 120 additional employees, raising employment at the site to more than 800.

“We outgrew the buildings,” Kinisky said. “But maybe more important I think was we needed to demonstrate leadership in building products. The space that we were in didn't do that. It was a space we didn't construct with our new forward-looking innovative thinking. What you'll see in the new headquarters is a totally different view of building science, technology and innovation and being put into our headquarters. It's a statement about what buildings can be and should be in the future.”

Saint-Gobain designs, manufacturers and distributes building and high-performance materials. The firm employs about 182,000 in 64 countries.