BEVERLY, Mass.—In a move to keep up with growing business and preparing for future development, Freudenberg Medical is building a new headquarters and medical manufacturing facility in Beverly that nearly doubles its current space.
The firm is investing more than $3 million for the project and plans to start construction in the next few months. The facility is projected to be complete sometime in the second half of 2019, according to Freudenberg Medical CEO Max Kley.
Freudenberg's current facility in Gloucester, Mass., is about 15 miles away from the new site. The company acquired the operation from Jenline Industries Ltd. in 2003. It employs about 40 and spans 19,000 square feet, Kley said. The Gloucester facility has been in operation since 1989.
"We felt that we didn't have the space to expand there in that building," he said. "We also felt that based on the growth we had, we needed more space and to upgrade the infrastructure. So that drove the decision to look for an alternative site in the community."
Even at the Gloucester location, Freudenberg had expanded significantly and invested in developing the facility, Kley said. It was also local to a busy medical device and biotech cluster in Boston. The region brings together multiple companies that have been a source of development for Freudenberg.
"We've seen significant growth in our medical business overall, but especially in the northeast, New England region for our type of services," Kley said. "We offer proprietary technology solutions, development services. And in the Boston cluster, you have a number of very innovative companies, where you have startups and you have global players. These are the types of services that are needed around there."
The question became how to add more space and add to the existing equipment and capabilities to take care of that business, he said.
"The idea is really to continue to bring something to the market that is more advanced and really helps our customers develop better products and accelerate development cycles, and give them something they may not necessarily find elsewhere," Kley said.
More than just trying to stay near the medical device cluster, it was important to Freudenberg to be able to bring along as many of its employees as possible to the new facility, he said.
"What was important to us was that we keep our very talented and dedicated staff, so we looked within a radius of about a 25-minute drive from Gloucester to make sure that we would really be able to retain our people," Kley said. "Beverly is the ideal site for us."
The plan is to move the entire operation from the Gloucester facility to the new Beverly location once the 36,000-sq.-ft. building is completed next year, Kley said. Freudenberg plans to hire on 25-30 new employees, bringing the total to about 70.
The new operations will be FDA-registered and ISO 13485-certified, and includes 18,000 square feet for two clean rooms, and space for warehousing and offices. Alongside the two clean rooms will be a third space rated as a controlled environment that potentially could be upgraded to a clean room.
The operations coming from the Gloucester facility include Freudenberg's high-end liquid silicone rubber molding and extrusion services, with highly automated, high cavitation cold-runner systems, Kley said. The company also offers coatings and works with engineering plastics, and sees opportunities in fields like in-vitro diagnostics, minimally invasive surgery and micromolding.
"It's a range of applications in the medical and pharma space," he said. "There's really a strong demand in the market for that type of service, especially for our approach, which includes offering proprietary technology platforms when it comes to materials."
In terms of capabilities, there will be more injection molding processes for highly automated LSR molding, Kley said. In terms of secondary processes, Freudenberg has a number of processes that allow for automated packaging.
Additionally, the Beverly location will serve as the company's new headquarters, bringing together management from sites across the country, Kley said.
"Our HQ functions have historically been distributed over a number of sites," Kley said. "We already have people in Gloucester, we had some HQ functions in the Detroit area, in California and in Europe. The idea was to pull all of those together and really make Beverly the global headquarters."
Beyond its proximity to a strong medical market, the new location has other points in its favor to work as a worldwide hub for the company, including a more accessible timetable for other markets.
"It's the ideal place for us due to the location of the time zones and the proximity to Logan Airport," Kley said. "We're able to easily travel and connect to sites in the U.S. and also Europe, Ireland and Germany. The time zone still allows you to communicate with Europe during normal work hours. That makes it the facility to line up the travel and communication."
Kley said the Beverly facility also comes with the option to expand by another 20,000 square feet in the future, which was another significant aspect for Freudenberg, given the development of the market recently.
"Depending really on the growth for the next few years, it was important for us to have that option," he said. "Based on organic growth, we think that there is a strong likelihood that we will need the 20,000 square feet and additional expansion space a few years down the road."
That growth has been a continued trend for Freudenberg in recent years as the market expands, Kley said.
"We consistently, over the last few years at the Gloucester facility, have seen double-digit percentage growth annually," Kley said. "We are very optimistic when it comes to the growth perspective for the medical and pharma market. There's a very strong growth opportunity and a very strong dynamic in the medical device market for these types of services. It's a lot of fun at the moment."