China's Mehow Builds Medical Molding Plant in Malaysia

Chinese medical injection molder Mehow Innovation Ltd. is investing more than $20 million in a new facility in Malaysia, its first outside China, as it responds to global customers who want it to diversify outside its home country.

The Shenzhen-based company, which has more than 85 injection presses and 1,000 employees at its headquarters factory, opened the first phase of its new plant in Penang, Malaysia, earlier this year.

It has started a second phase there that will be completed by the of the year, which will give it a little more than 20 molding machines in Malaysia.

Feng Yuan, director of business development, said the move is motivated by customers who in general want to reduce the risk to their own supply chains from both natural disasters and political and economic situations.

"One of the reasons is risk mitigation," said Yuan in an interview at the Chinaplas trade fair in Guangzhou. "We needed to have two sites to make the parts for our main customers. … Our customers encourage us to have another site overseas."

The company manufactures parts for global suppliers like Cochlear Ltd. and Chinese medical device makes like Shenzhen-based Mindray Medical International Ltd.

Mehow was exhibiting at Chinaplas, which typically draws in machinery and material companies as exhibitors rather than parts makers, because it wanted to promote a newer business it's developing in molding parts from liquid silicone rubber.

But Yuan said the Malaysia expansion is focused on the company's traditional thermoplastics molding and manufacturing operations, for now at least.

The Penang facility opened earlier this year with seven injection molding machines, and in its next phase that will open later this year, it will install another 15 molding machines, all from the German supplier Arburg, Yuan said.

It has about 80 employees in Malaysia now, and Yuan said the investment there could rise to $25 million.

More than 90 percent of its manufacturing is exported and about 75 percent of its sales are in thermoplastic parts, with the other quarter in LSR. About 65 of its molding machines in Shenzhen are focused on thermoplastic molding.

Yuan said the company has focused on upgrading: three-and-a-half years ago it set up a research and development center in Shenzhen, where it now employs about 100 engineers.

He said the privately held company does not disclose sales figures but he said they've risen more than 30 percent annually for the last five years.