Nolato expands diagnostics capacity amid ongoing pandemic

BALDWIN, Wis.—Nolato Contour USA is expanding its diagnostics capacity "with caution" as demand for COVID-19-related testing continues to rise.

"There was a mad rush to increase availability of ventilators to support a demand (at the beginning of the pandemic) that in many cases that just was not required," Anthony Fleszar, director of sales and marketing at Nolato, told Plastics News. Nolato Contour was previously called GW Plastics Inc.

Since the manufacturing cells for diagnostics are "highly specialized," Fleszar said, Nolato is making sure there's a strong business case for its investments through contracts with its customers.

"We haven't done anything without contracts because it's a big risk when we invest," said Mattias Persson, director of business development at Nolato. "We only go with reliable, old partners and haven't gone with anyone aspirational."

COVID-19-related diagnostics customers have been offering to buy any idle capacity in Nolato's plants, Persson said, while demand for other kinds of diagnostics products has gone down.

Before the pandemic, he added, diagnostics "was a very niche market," and it's been challenging for the industry to qualify suppliers of pipette tooling.

"More suppliers needed to be developed and you don't develop these overnight," he said.

Nolato broke ground on an expansion of its Baldwin, Wis., site in July 2021 to create three new Class 8 clean rooms, two of which will be dedicated to the diagnostics market.

The expansion is expected to be complete in the second quarter of 2022.

It also purchased 34 new automated machines for assembly and packaging of diagnostics products and 14 new injection molding machines, Fleszar said.

The company is now seeing a return in volumes of demand for surgical devices used in elective and endoscopic surgeries, but they have yet to reach pre-COVID volumes, Fleszar said.

"Having our business in the diagnostics market has really helped balance our business throughout the pandemic," he added.

Nolato is also growing its contract manufacturing of finished medical devices and drug delivery business, including thermoplastic molded components for a wearable insulin delivery device and an automatic injector for other medical needs.

"In the past patients would go into a clinic to have a rheumatoid arthritis shot," Persson said. "When COVID started, they educated patients very fast to use an autoinjector at home instead of going into the clinic."

Patients aren't expected to start going back to clinics for injections again anytime soon, he added. "Why would you waste all that time when you can get a number of these … injections in your house when it's needed?"

In August 2021, Nolato completed a 3,000-sq.-ft. expansion of Class 8 clean room space for its silicone molding division in Royalton, Vt., after another 30,000-square-foot expansion last year of its Manufacturing and Technology Center a few miles away.

Nolato has acquired "a number of" conventional injection molding machines and automation for a consumable device used in cancer diagnostics for its Tucson, Ariz., location, where it manufactures and assembles robotic surgery components, another growing market, Fleszar said.

Nolato is "definitely concerned" about the COVID-19 omicron variant's effect on continuing supply chain issues in 2022, Fleszar said.

"Raw material availability has been a big challenge over the course of 2020 and 2021," he said. "Our initial focus was on identifying risk in our supply chain … a considerable effort due to the number of suppliers we're managing."

The company worked closely with both its suppliers and customers, "significantly" increasing communication to manage lead time challenges and material supplies, Fleszar said.

Its customers air-freighted machines to facilities instead of relying on sea transportation because of backups at ports.

"Our customers really struggled with delivery of components used in their assembly as well," he added.

Torekov, Sweden-based Nolato AB acquired GW Plastics Inc. in September 2020 to expand its North American operations. Nolato currently has about 6,700 employees worldwide.