Molding a new future in the life sciences
By donald n.s. unger
Manufacturing in Central Massachusetts has gone from heavy-scale to human scale as companies shift more focus to the biomedical market. For them, it’s a matter of survival.
Scott Amos, economic development manager at the North Central Massachusetts Chamber of Commerce in Leominster, says that expansion into new markets, rather than attempting a complete retool, is the way to go for local manufacturers."How would they have the capital needed to install new machines, build new tools, and, most importantly, develop new processes of production for these markets?" he asks. If most of the region’s manufacturers were to attempt such an effort, he says, "I can almost guarantee that they would go out of business."
Injectronics: The domestic advantage
Clinton-based Injectronics has vaulted from $12 million in 1990 revenue to almost $100 million today as a manufacturer of thermoplastic injection molded components and assemblies, mostly for the automotive industry. It’s among the top 15 percent of North American injection molders.
Injectronics President Paul Nazzaro cites bio-med manufacturing as an area in which local companies enjoy a comparative advantage over competitors in China and India. The American markets for these products, he says, have stringent quality requirements for healthcare products and for clean rooms; they need to be able to inspect the manufacturing process and be an ongoing part of it, something impossible to do over long distances.
The company’s Medical/Healthcare Division will close 2005 having grown by 250 percent since 200, according to John Schwab Jr., manager of that division. During 2006, the company expects to increase the current customer base in that division still further, by 60 percent. Injectronics is in the process of formally separating its business units, Schwab says - a transition made necessary by its continued growth in the medical/healthcare arena.
The biggest hurdle he sees in the coming year is the rising cost of oil and monomers, coupled with the utilization levels of many resin manufacturing facilities. "Based on these factors," he says, "one of our biggest challenges for 2006 will be to keep our resin buy in check."
Nazzaro acknowledges the possibility that Injectronics might eventually build overseas manufacturing plants to serve foreign markets. Injectronics already procures services from China, and engineering services from India. For the foreseeable future, however, he sees the domestic biomed market being served by domestic facilities.
Acromatic Plastics: early adopters of CAD/CAM
Acromatic Plastics was founded in 1973, after starting up in business some nine years earlier as Crisci Tool and Die, Inc. Originally established as a machine shop which specialized in manufacturing molds for the plastics industry, Acromatic has consistently changed with the times, moving first to injection molding and subsequently becoming an early adopter of CAD/CAM (Computer Aided Design/Computer Aided Manufacturing) technology.
Acromatic President and CEO Peter C. Crisci was one of the founders of the original tool and die company. The medical market is one of the four pillars on which the company now stands, along with consumer goods, automotive parts, and industrial applications.
Crisci declines to give specific dollar figures but evinces optimism about Acromatic Plastic’s prospects in the coming year. "The volume of new business coming in," he says, "is at an all time high. It looks like it will be a very good year." Noting that the company has just moved into a new 110,000 square foot plant, he says he expects biomed, a growing part of the business, to expand to 30 percent in 2006. The company will be adding more equipment, as well.
He sees a range of potential challenges: the rising cost of capital, healthcare, and energy, and pressure from foreign competition high on the list.
Mar-Lee Companies: Racing to meet market demands
The Mar-Lee Companies, based in Leominster traced a similar trajectory, founded as a mold maker in 1972. Its current customer list includes such companies as Medtronic, Becton Dickinson, Genzyme, Boston Scientific, and Abbott Laboratories.
John Gravelle, President of the Mar-Lee Companies says that the bio-medical market made up more than thirty percent of their total volume this year and he expects continued growth in the area in the year to come. Having spent several years adding new facilities and capacity, including clean rooms and white space, he says the company still has had to turn away business in the bio-med area. as fast as they add capabilities, the market is growing faster. They expect to open yet another facility in March.
Along with high energy costs, Gravell says, he sees access to capital as being one of the barriers to growth in the future. As far as attracting enough employees with the right skills, he cites local educational institutions, like WPI and UMass Lowell as being good sources of engineering talent. On the sales side, as a small to mid-sized company, he says he’s found it a little more difficult to find the right people.
Kinefac Corp.: Still standing
After more than 40 years, Kinefac Corp. is just about the only machine tool maker left standing in Worcester. One way President and founder Howard Greis accomplished this was by buying competitors. A 1991 purchase was Sleeper & Hartley Co., once seen as the nation’s leading supplier of wire-forming springmaking machines throughout the 20th century. Its former headquarters now serves as the flagship store for Worcester-based Tatnuck Bookseller & Sons Inc.
But Greis has not simply amassed corporate subsidiaries, he has pursued new technologies, new markets, and new approaches, the bio-medical market on the list and rising. Kinefac still makes machines that produce the heavy steel linkages used in automobile manufacturing, for example. But it also works the extreme opposite end of the market, turning out machines which produce coils for medical applications, made from wire as narrow as .0015" or 40 microns in diameter.
By way of comparison, human hair ranges in diameter from 40 to 120 microns.
Kinefac is also interested in building those machines in China, to serve the Chinese market, although when that will be possible is unclear, given the bureaucratic hurdles involved. In terms of obstacles to growth, he cites a lack of skilled labor, a problem the company has been wrestling with for several years now.
Greis emphasizes the importance of a workforce with a high level of technical competence, and with a deep commitment to and involvement with all aspects of the design and production process. "Anybody who designs anything around here, including me, has to make it work," he says. A similar axiom applies to the sales force. "Anybody who works directly for Kinefac and sells our machines," Greis says, "can operate those machines."
Greis says that Kinefac did well in 2005 and he expects 2006 to be even better. The company is building back from the decline of the domestic auto parts business, which peaked for Kinefac in 1998, then constituting some 75 percent of Kinefac’s business. Machines which make parts for medical devices, a business the company has been in for only five years now, made up 12 percent of their market this year. He expects that number to rise, to perhaps 15 percent in the coming year.
Amplior Inc.: Support for retooling
One private sector company facilitating this transition is Leominster-based Amplior, Inc. It’s a a business and technology development company that works with individual entrepreneurs, existing medical technology companies, and university technology transfer offices to commercialize early stage medical technologies.
Amplior’s President and CEO Timothy R. Gerrity sees a number of opportunities and trends in the biomed sector. Manufacturing areas that will benefit from expansion of the medical device sector, he says, include precision injection molding, optical companies that formerly majored in telecommunicatons; precision metal working, and specialized metal coatings, to name a few.
Gerrity cites several supports for this kind of retooling, MassMEDIC and MassMEP among them. The latter, The Massachusetts Manufacturing Extension Partnership, is a non-profit service center which serves Massachusetts manufacturers, striving to keep them competitive in the global marketplace. The center is part of a nationwide network linked through the National Institute of Standards and Technology (NIST), at the U.S. Department of Commerce.
To successfully transition or expand, Gerrity says, manufacturers need a number of basic characteristics. They include: acquisition of clean room facilities; FDA device registration, ISO9001-2000 registration, aggressive quality control and assurance programs, excellent supply chain management, and the ability to work with materials unique to medical technology such as moldable bio-absorbable materials for implants and metals like nitinol, the shape-memory metal that is an essential part of coronary artery stents.
Beyond those basic characteristics, he stresses, companies succeed by working hard to understand the needs of their customers, by playing an active role in the medical device innovation process. They don’t just make products to spec; they participate in the creation of innovative technologies, he says.
Materials, energy costs
hit hard
A challenge cited by almost all manufacturers is the cost of energy. Central Massachusetts is at a growing disadvantage to other parts of the country vis a vis the cost of energy, Amos says, and this year the plastics manufacturers in Northern Worcester County have been hit with a triple whammy. The cost of electricity has skyrocketed, largely because of soaring natural gas prices, and the cost of the resins on which their products are based has gone up, because they are petroleum-based. The cost of transportation has risen, as well.
The natural gas problem is a consequence of a number of factors. The US has some of the highest natural gas costs in the world, Amos notes, and Massachusetts, a big user of natural gas, also pays some of the highest costs in the nation for it.
The great majority of generating plants built in Massachusetts in the past decade or so have been gas-fired. They’re cheaper to build than other types, and they also run cleaner. Given the prevailing winds, Massachusetts gets a lot of air pollution from coal fired plants in the Midwest, and has sought to use cleaner burning fuels to offset that problem.
"No matter where it is coming from [Canada or the Gulf Coast], we are at the end of the pipeline," Amos says.
Running faster than the
next guy
To the extent an increased emphasis on bio-med represents a shift in local manufacturing, Kinefac’s Greis says that’s of semantics. It depends what business you think you’re in to begin with, he says. "Everybody thinks there’s a big difference," between what he calls the heavy stuff and the light stuff. "The truth is, it’s all fundamental engineering.
"We essentially sell technology," he says. "It’s very hard to patent it; you just have to run faster than the next guy. And you have to find niches where you can be the best in the world."
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