Molder Carclo Expands in China

UK-based injection molder Carclo is “significantly” expanding its Chinese medical manufacturing capacity with a new factory, as the company said it’s seeing growing business from global medical device firms there.

The publicly-traded company said in a 18 November earnings report that it’s moving its China operations from Shanghai to the nearby city of Taicang, Jiangsu Province, where it said it will boost its capability for cleanroom manufacturing of components for diagnostics devices.

“The new facility is significantly larger than our existing one and will provide cleanroom manufacturing capacity to support the long term expansion of the medical business into China,” the company said. “China has become the fastest growing consumer market for medical devices.”

Executives with the West Yorkshire, England-based company did not provide more details on the China expansion, but said it’s been awarded a multi-year contract in China from an existing customer headquartered in the US.

It expects increased interest in China among its clientele of medical device makers.

“Whilst this investment is supported by an existing global customer program, we have several other key strategic Western-based global accounts who we believe will use our newly expanded business during the medium term,” it said.

Medical is a major business for Carclo, which has factories in the UK, the US, the Czech Republic, China and India. About 60% of its global revenues come from its technical plastics division, mainly from medical devices, it said.

The Chinese announcement came as part of the company’s 18 November half-year earnings report to the London Stock Exchange.

It said global revenues for its technical plastics unit, its largest, were up 7% in the first half of the year, “just ahead of global medical market growth,” to £30m (€37.6m).

Profits before rationalisation costs were up from £1.7m (€2.1m) in 2013 to £2.3m (€2.9m) now.

“This was primarily due to growth in our US and Czech operations,” it said. “Our Chinese business also had a stronger half than in the previous year and our Indian business continued to perform well.”

It specifically said it gained new business in the first half from the completion of an expansion of its US and Czech facilities.

Across all its corporate units, however, the company reported significant losses in the six months ending 30 September, mainly from its troubled conductive inkjet technology unit, which includes operations making coated films for touch screens.

The previously reported closing of a money-losing plant in Harthill, Scotland, and write-down of £21.3m (€26.7m) in assets in the CIT division pushed the company into an overall loss of £20.9m (€26.2m) on £48.8m (€61.1m) of revenue.

“As announced previously, the poor financial performance and the lower than expected take up of the touch screen technology has precipitated a full strategic review of the [CIT] business,” it said, adding that it expected a better second half from new business in technical plastics and lighting, development of tooling programs and the typically better seasonal results in the second half.