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Tessy Plastics’ investment in China not only brought opportunities in Asia; it also attracted new business to Tessy’s North American operations.

November 24, 2009

8 Min Read
Plant Tour: China venture brings big 
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Tessy Plastics’ investment in China not only brought opportunities in Asia; it also attracted new business to Tessy’s North American operations.

Tessy Plastics Shanghai (TPS) is located in the Medical Device Park in the newer Pudong region of the city, so it may come as a surprise that currently only 3% of TPS’s business is derived from the medical and bioscience segments. But that’s about to change. “By 2012, TPS aims to boost this part of its business to 34% of revenue, and by 2015 the target is 70% of revenue,” says Tessy Plastics Shanghai manager Nils Hammerich. Already, eight projects are either in the qualifying stage or in production in Shanghai.

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Tessy’s Nils Hammerich (fourth from left) with his management team, including operations manager Gan Kok Hwa (far left) and engineering manager Tom Fang (third from left)

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Tessy Plastics Shanghai’s home is in a medical device industrial park 20 minutes from Pudong International Airport.

Conversely, TPS currently has just one automotive project ongoing in China, this despite just getting TS 16949 certification in 2005. That’s not to say Tessy would ever abandon a customer. “We will continue to serve existing nonmedical customers as long as they need us and indeed may still expand in nonmedical areas,” says Hammerich. “We never say no to customers that have long relationships with us.” In fact, he adds, “We don’t work with a fixed strategy. We have direction but are prepared to adjust to meet customer demands.”

One key nonmedical customer is Duracell, for which TPS molds battery covers at the rate of 21 million weekly. These are inspected individually for their dielectric properties using specialized equipment. The customer also has exacting standards when it comes to using regrind. Exactly 30% is the required ratio, and sprues are reground press-side prior to feeding back to the hopper dryer using a proportional valve.

Battery covers is one business that TPS does not plan to give up, but, generally speaking about electronics, it sees more and more local companies getting into the sector and competition becoming cutthroat. “However, I don’t think that five years down the road there will be many local molders that will be able to succeed in medical,” says Hammerich.


Cleanroom conversion
One key to TPS achieving its goals in the medical sector is its 12,500-ft2 ISO Class 8 cleanroom molding area with a movable wall. When IMM visited the TPS facility, this wall had made its way perhaps 20% down the length of the shop floor, and three Sumitomo injection machines were operating under ultraclean conditions. Most of the rest of the processor’s 21 machines were busy molding components for clients in the business machine, automotive, and consumer and electronics fields under a controlled environment, while the HEPA filters wait overhead for the wall to advance further.

TPS started molding in Shanghai in 2001 and moved to its current location in August 2007. The facility also includes a 5000-ft2 cleanroom assembly area. “All areas of our operation are climate controlled, whether they are cleanroom or not,” says Gan Kok Hwa, TPS’s operations manager. “We need to control temperature and humidity in order to remove external factors and better control our processes.”

In one noncleanroom area—a packaging section connected to the adjacent cleanroom assembly area by a pass-through box—the workers are kitted out in cleanroom attire. “It makes them feel proud of their jobs and act in a cleaner manner,” says Gan. All-electrics are also seen as the cleanest option for cleanroom molding and eventually the Shanghai site expects to be operating 100% all-electric Sumitomo presses. “Shot-to-shot repeatability is excellent, even for multiple cavitations,” says Gan.

But even though TPS is doing its best to be energy efficient by using more all-electrics, it still has to take one week off in the summer due to electricity shortages. “The local authorities basically give us one week’s notice of the forced shutdown,” says Gan.


Human resources
Another key to TPS’s success is its people, and this will become an even more crucial factor moving forward with the new emphasis on medical. “The skill requirements are definitely higher and we plan to cater to this through a cell-type organization where medical will be separated from nonmedical,” says Hammerich. “We are starting to develop a special team in China for medical, who will work in the cleanroom environments and enjoy different status and pay scale.” This process also involves training in the United States.

“For us, the technical aspects of molding and assembling are the same, be it medical or otherwise. What’s different with medical is you need cleanliness and you need documentation,” says Hammerich. This includes serialization and lot control, ensuring that each product can be traced back to its originating source, whether that source is a component, material, or machine.

Even today, staffers are acutely aware of their responsibility. Daily morning meetings ensure everyone knows what products are running, as well as any delivery issues, so customers can be alerted ahead of time. This applies to assembly and molding.

There’s also a job skills board featured in the assembly area so that management knows which employees are qualified to do what. “We do a high mix of low-volume products, so we need to be able to identify who’s capable of doing what and organize training appropriately if there are needs,” says Gan. TPS’s midterm strategy is to focus on products where the mold runs for less than 1500 hours/year for up to 50% of its business.

A high emphasis on visual aids to detail procedures on the assembly and mold shop floors helps to recognize and isolate reject parts. “Samples of reject parts are displayed to ease the identification process, and production and quality control have a common understanding of what’s a pass and what’s a reject,” says Gan.

For medical devices in particular, a lot of material comes from the United States because it is specified by the client. The material may be delivered in 25-kg bags or gaylords, but whatever the packaging, the resin is transferred to bins outside of the clean side of the plant for drying and conveying to the injection presses. “No cartons with resin are found on the molding shop floor,” says Gan. “The last thing we want is dust from cartons.”


Back in the USA
Tessy’s China operation also includes a 24,000-ft2 warehouse located about 1 km away. Back in the United States, Tessy operates out of Elbridge, NY, where it has two facilities of 125,000 ft2 and 230,000 ft2, and a 50,000-ft2 plant in Lynchburg, VA. These operations use high-speed automated assembly to counter higher labor costs.

Some projects at Tessy have started out from the U.S., where processes have been debugged, validated, and certified. Once the project is running smoothly, it may be relocated in its entirety to China on a turnkey basis. “We’re not only talking transfer of tools here, but also robots and injection machines,” says account manager Matt Learo. “Any customer loves to hear that wherever the tool goes, the machine will follow.” Backing up such transfers is replication of quality control equipment at all Tessy facilities globally. “If a project transfers, the site is immediately ready to take it on,” says Learo.

Corporate sales were $140 million in 2008, the company employed 1000, and globally, Tessy operates more than 225 injection molding machines ranging from 30-530 tons clamping force. The processor is considering expanding its U.S. operations, which started back in 1973 with two Arburgs, coincidentally with a medical project. “This might entail the addition of 30,000-40,000 ft2 in New York, or even setting up a new plant,” says Learo. “We’re also looking at doubling the scale of our Lynchburg site.”

This represents a strong comeback from the depths of the recession, when Tessy saw its U.S. business contract 30% overnight. “We were quickly back in the black, however, and 2010 looks like it will be the best ever.”

The company attributes its growth and success to keeping its existing customers happy, gaining new business by word of mouth via engineers at its clients that may have changed jobs, and of course its China operation. “The Shanghai facility was never seen as a threat to business back home,” says Learo. “In fact, once the word spread, we were getting calls from new customers who learned of our newfound global footprint. Our move to China actually boosted our business in the U.S. big time!”

Learo says that complex medical devices are generally still made in the United States, and that customers in China are usually starting with production of more basic products. “Many are adopting a wait-and-see stance when it comes to more challenging production in China. They still need to be ready, though, and so do we.” —Stephen Moore

Tessy Plastics Shanghai, Pudong, Shanghai, China
Facility size: 71,000 ft2
Annual sales: $14 million (2008)
Markets served: Medical, bioscience, auto, electronics, business machines
Customers: Millipore, Xerox, Duracell, Welch Allyn, Fuji Xerox, Ethicon, Lutron, Kodak, GHSP, others
Parts produced: More than 1 billion/year
Materials processed: PC, POM, PA, PP, PPA, PE, PBT, LCP, ABS
Resin consumption: 2000 tonnes/year
No. of employees: 300
Shifts: 2 x 12 hours (two days on/two days off), 24 hours, seven days/week
Molding machines: 25, 40-530 tons; Sumitomo, Haitian, Sandretto
Secondary operations: Ultrasonic welding, pad printing, decorating, staking, machining
Other services: Assembly of sub- and complete systems, functional testing, leak testing, molding simulation analysis, mold design, product design optimization, contract packaging
Internal moldmaking: No
Quality: TS 16949, ISO 13485, ISO 9002, UL

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