February 17, 2014

Plastics firms retool to meet changing demand

The first thing John Gravelle did after purchasing Sterling Manufacturing in 2011 was close the factory.

Gravelle, a 40-year veteran of the plastics manufacturing industry, felt the Lancaster-based injection molding company had become complacent in recent years and needed a facelift.

So Gravelle shut the facility down for two weeks and made renovations. He built a cleanroom for medical device molding, brought in state-of-the-art machinery and automated as many functions as possible.

Business is up more than 50 percent since then, and Gravelle expects Sterling's growth to continue at a 25-percent annual rate for at least the next three years.

"Plastic is being used in more and more sophisticated products today than it ever was," he said.

Two paths have emerged for plastics manufacturers in Central Massachusetts.

Some stuck with producing consumer goods and opted not to update their machinery. Many of those companies have struggled mightily, either going out of business or becoming much smaller, Gravelle said.

Meanwhile, others invested in new equipment and technology and repositioned themselves in high-end fields such as medical devices, Gravelle said. Those businesses are still standing.

"The last five years have weeded out the weak," Gravelle said. "Every good molder I know in this region is stronger than ever."

Unlike many plastics jobs, medical device work has largely not gone overseas due to compliance and regulatory issues. Gravelle said it's much easier for these manufacturers to get certified in the United States due to problems with toxic lead paint and other materials in China.

Work tends to stay in U.S.

The U.S. Food and Drug Administration subjects medical device companies to tight scrutiny, prompting many clients to take advantage of cutting-edge technology that allows them to monitor online the temperature, processing speed and mold-control settings at the manufacturing plant, said Stephen McCarthy, co-director of the Massachusetts Medical Device Development Center (M2D2) at the University of Massachusetts Lowell.

Thanks largely to this sector, Worcester County's employment in the plastics industry fell by just four percent during the Great Recession, from 3,839 in 2008 to 3,667 in 2011, according to the U.S. Census Bureau. Annual payrolls actually increased 1 percent over that period.

"The industry did rather well throughout the recession," said Jack Healy, director of operations at the Massachusetts Manufacturing Extension Partnership (MassMEP) in Worcester. "You don't see the downsizing that you saw in the past."

The region went from having 79 plastics firms in 2008 to 73 in 2011, according to BEA data, with the decline stemming almost entirely from businesses with between 20 and 99 employees. Mid-sized companies are too big to specialize in ways smaller firms can, Healy said, yet are often too small to have a solid customer base.

The region's largest plastics firm — Nypro Inc. — enjoyed a year of growth fueled by the deep pockets of Jabil Circuit, the publicly-traded company that bought the Clinton-based precision plastics manufacturer in 2013.

Nypro signed a lease for 205,000 square feet of additional manufacturing space in Devens in November and has begun renovation work at the site, thanks to an infusion of capital by Florida-based Jabil. Nypro hopes to finish setting up a 60,000-square-foot clean room at the former Evergreen Solar plant by summer and have 50 people working there by mid-2015, General Manager John Witkowski said.

The company will build out the remainder of the facility as demand necessitates and hopes to eventually employ 150 to 200 there, Witkowski said.

Both Nypro facilities will handle similar products, though Devens will have more streamlined functions due to the large cleanroom. (The company's 650,000-square-foot headquarters in Clinton has several small cleanrooms.)

"Devens is a duplication of the manufacturing processes we do in this (Clinton) plant," Witkowski said.

Nypro plans to introduce a finished packaging unit later this year with 10 to 15 employees who will handle and load drug cartridges into assembled medical devices, Witkowski said. That work is currently handled by other companies after Nypro builds the products.

And the company launched a device design and development group in 2013 to help startups commercialize products by providing manufacturing design and prototype assistance, Witkowski said. Most workers in this group were reassigned from other tasks.

Becoming part of Jabil has also allowed Nypro to offer clients electronics work at Jabil sites, Witkowski said. Circuitry and circuit boards are increasingly being integrated into medical devices, he said, but Nypro had been unable to service those needs as a standalone company.

New ownership has also improved fortunes at Mayfield Plastics of Sutton, which was acquired by Holyoke-based Universal Plastics in October. New owner Jay Kumar said revenue at Mayfield is expected to grow 15 percent this year.

The plastics companies have complementary business lines, Kumar said, with Mayfield primarily servicing Boston-area medical manufacturers and Universal largely providing aerospace thermoforming services to companies in Connecticut and New York. But Kumas said each factory can do the other's work in a pinch.

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