Pregont

The company did not disclose the extent of the expansion of its 4-year-old plant in Shanghai, only saying that it should be complete by the beginning of 2010. “We have outgrown our space in China,” said President and Chief Executive Officer Joseph Pregont in an April 14 telephone interview.

Medical packaging accounts for more than 50 percent of the company’s estimated US$130 million (888.2 million yuan) in sales, followed by electronics packaging. Prent designs and manufacturers blister packs, pressure-formed trays and clamshells.

The Denmark plant, the company’s sixth, will be the first in Europe for the Janesville-based company, and the fourth outside the continental U.S. It is scheduled to be finished in the fourth quarter of this year.

Like Prent’s other thermoforming packaging plants, the Denmark plant will have a Class 100,000 clean room and the company’s own custom-built thermoforming equipment that incorporates robotics.

The expansion into Europe was driven by market conditions, he said.

Prent currently serves Europe from its plants in Shanghai; Johor, Malaysia; Flagstaff, Arizona; and Janesville. Pregont said the company’s plants range in size from 2,800 to 18,580 square meters. The largest is in Janesville, and more than half of the company’s capacity is in the U.S.

“We are reacting to customer demand and going where our customers want us to be,” said Pregont, who has run the family-owned business since 1984. “We needed a presence in Europe to be a global supplier for our customers,” particularly European medical device manufacturers.

“The Denmark plant will be a greenfield plant with all new equipment,” Pregont said. “We will start small. We have some commitments. But we don’t have a big chunk of business. We will start with a few machines. We have room to grow to as big as the demand gets.”

Pregont said the Denmark plant will be “a little bit bigger” than the company’s 2,800-square-meter facility in Yauco, Puerto Rico, which opened in 2006 and serves the Virgin Islands and Central American markets. That plant derives 70 to 80 percent of its sales from medical packaging.

Like its other global expansions in Malaysia, China and Puerto Rico, Pregont said the company will build the European market through organic growth from existing and new customers.

“We haven’t purchased any companies, so everything we do is developed through organic growth,” he said. “We have a very defined effort when we open new facilities. We start small with 25 to 30 people and create a new market area” for the company.

In Malaysia, for example, Prent has expanded production space 50 percent, increased employment five-fold and improved sales by 3,000 percent since the plant opened in 1998.

The new Denmark plant and the China expansion come on the heels of several other expansions over the past two years. In 2007, Prent completed a remodeling in Flagstaff that made the facility larger, expanded the Class 100,000 clean room, and increased production volume. That same year, Prent opened its machine building facility in Janesville and shifted all of its equipment building to that site.

In addition, the company expanded its secondary operations in 2007 to add custom, multi-step automated processes such as radio frequency and sonic sealing, Tyvek and lid stock seating, match metal part trimming, multi-part assembly and part decorating, pad printing and hot stamping.

Although the medical device industry has not been impacted as much as other sectors of manufacturing, Pregont said there has been pressure from device manufacturers, pharmaceutical firms and hospitals to cut costs.

“There are real pressures,” he said. “We have to continue to come up with improvements on processes and with alternative materials to take costs out of the products we sell.”

Pregont said the company’s proprietary technology and the fact that it builds its own thermoforming equipment are strategic advantages.

“Our technology and our equipment help us control our own destiny,” Pregont said. “We build all of our thermoforming equipment, and all of our equipment is interchangeable, so we can move production and equipment from plant to plant and ensure great consistency for our customers. It provides us and our customers tremendous flexibility” in turning around orders quickly.

Prent has more than 1,000 employees worldwide, roughly half of them in Janesville, and 300 in Malaysia.