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Investing in the Future

March 27, 2009 – 2:58 pm

The faltering economy hasn’t side-tracked the growth agenda at T.O. Plastics.

The Clearwater, MN-based packaging manufacturer has added 60,000 sq ft of manufacturing space, in order to support an expanded focus on medical device packaging.

The capacity resides in an Ostego facility that will house a new high-speed inline thermoformer, and ISO-certified 100,000 and 10,000 cleanrooms. T.O. Plastics will add 25 employees, and foresees doubling that number over three years,  says Mike Vallafskey, president.

The Ostego location puts the 60-year–old company 35 miles closer to customers including Medtronic, Boston Scientific, 3M, American Medical Systems, and St. Jude, in the Minneapolis-St Paul metro area.

“We are 50% operational since Tuesday. New forming and packaging equipment hit the floor this week, and will be fully functional in the next week to 10 days. We have now gone from 70% utilization to 40%, therefore freeing up another 35% to 40% capacity,” Vallafskey says.

With the expansion, T.O. Plastics will be able to offer customers a dual manufacturing source for insuring supply, while providing the added resources for medical device packaging. The firm’s rigid tray production will expand to include also flexible packaging.

“We have not [previously] had a strategic plan in place or the capabilities and capacity to run [many of ] the parts that medical device companies require. We are very fortunate in this tough economic period to have the resources to do this. Some of the growth is built on speculation. We are also looking for our customers to drive requirements,” Vallafskey says.

The healthcare industry has not been untouched by the weakened economy. The Beige Book survey of the economy from the Federal Reserve Board covering January and February reported that healthcare service providers incurred falling patient volumes as patients held off on elective procedures, and cut back overall on spending. (Although pharmaceutical and bio-drug sales were a bright spot).

T.O. Plastics’ growth agenda is based on a longer-term outlook, as Vallafskey advised employees in a recent newsletter:

“Our 2009 strategic growth plan incorporates forward-thinking, proactive initiatives, as we know and understand that the ‘status quo’ is not acceptable. To operate complacently in today’s economy would be fatal. Therefore, the decisions being made today are predicated on where we want to be five years from now, not just on where we want to be tomorrow.”

David Vaczek

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