Industry Watch 17060

U.S. molds made in Moscow

Nypro Inc. (Clinton, MA) has put $2.7 million from a government-sponsored loan together with up to $5 million of its own funds to build the first U.S. moldmaking company in Russia. The new tooling center will be housed in the recently renovated, ISO-certified, 115,000-sq-ft facility belonging to Nypro-Moscow, Russia’s first custom molding plant.

Nypro-Moscow, or Zao Nypro, runs 11 Demag Ergotech presses up to 350 tons, 24/7, molding parts for U.S.-based multinationals like Gillette, Procter & Gamble, and Ford Motor Co.; and for Russian customers such as Ulex (a supplier of airline cups) and Okteon (an electronics firm). Lean and Six Sigma manufacturing are standard practices. Two-shot molding is also done.Gordon Lankton, chairman at Nypro, admits it’s been a hard slog getting Zao Nypro up and running with all the ups and downs in the Russian economy over the last decade. But he believes Russia is a great place to be today.

“Russia has the fastest-growing economy in the world right now,” Lankton says. “It’s the second-largest exporter of oil next to Saudi Arabia and money is flowing in. All of a sudden Russia is making significant improvements to its infrastructure as its economy continues to strengthen. It’s booming. Nypro-Moscow has doubled its sales each year for the last two years.”

Lankton credits Zao Nypro’s Tanya Dreval, managing director, as being instrumental to the company’s success. Originally hired as an interpreter, she worked her way up to a sales manager’s position, and took over the helm about three years ago.

Lankton also credits Muñoz Investment Banking Group LLC (MIBC; Washington, DC) for helping Nypro secure its government-sponsored loan. The loan came courtesy of the Overseas Private Investment Corp. (OPIC), which provides financing and political risk insurance for private sector investments in emerging markets.

“Nypro would not have made this investment at this time without OPIC, and the Muñoz Group made it possible to work through the process at OPIC,” says Lankton. “This loan helps us acquire the equipment we needed to get the toolmaking facility fully operable.”

George Muñoz, a principal of MIBC, served as the financial advisor on Nypro’s OPIC loan. “OPIC supports only those projects that it believes are good for our country and for the country where the investment is being made,” he says. “Nypro’s reputation for high-quality products and operations was a major determining factor. OPIC also supported the project because Nypro showed how this investment would not take away U.S. jobs; on the contrary, it would make Nypro more competitive worldwide.”

Muñoz says there’s plenty of money for international projects like Nypro’s, but for most companies it’s difficult to get through the government maze. Most look at the process and quit before they begin.

“Other companies who would like to secure financing similar to what Nypro has accomplished need to adhere to some basic principles,” he says. “They need to be willing to finance a portion of the debt on their own, they need to offer continued employment and growth for their U.S. operations, and they need to contribute in a positive fashion to the economy in the country where they are expanding.”

Lankton plans to do all of the above, especially the latter, with the new Russian toolmaking venture.

“I believe tooling is as important as molding. We intend to establish a world-class moldmaking operation, with the best moldmaking equipment available anywhere, right in the center of Moscow.”

Is now the time to expand?

If you play your cards right, you bet it is! PGM Plastics Inc., a custom molder in Fitchburg, MA, has invested about $1.5 million in site acquisition and improvement costs and about $2 million in all-new equipment and auxiliaries that will be going into what soon will be a fully renovated 30,000-sq-ft facility right next door to its existing, highly automated 50,000-sq-ft plant.

PGM is not just betting the farm, fingers crossed, and hoping to sell machine time in its new facility. Instead, it inked a long-term agreement with a major multinational firm to be the sole U.S. producer of a line of its products—before reaching into its wallet. Its existing plant houses 16 presses from 80 to 1000 tons, mostly Milacrons. The new facility will have 10 all-electric Milacron/Fanuc Roboshots running (165- to 330-tonners) when it goes onstream in mid-January 2004. Stay tuned.

Going mobile

A machinery rep based in the Northeast has taken its show on the road. At MassPlastics 2003 (Oct. 22-23, Fitchburg, MA), Absolute Machinery Corp. (Worcester, MA) introduced its mobile technology center, a custom-built showcase for its newest wares that can be driven right up to its customers’ front doors.

Absolute says that the new machines it reps from suppliers like Demag Plastics Group, Mitsubishi EDM, and AEC Inc. (whose theme, coincidently, happens to be “Anything, Anytime, Anywhere”) often are too difficult to describe with just technical brochures and photos. Now Absolute can show its customers the benefits of what it’s got as a new system is released.