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John McGavigan to build parts plant in China

Scottish plastics processor and decorating firm John McGavigan is building a factory in China to meet what it said are demands for higher-quality, more visually-appealing components like dashboards and entertainment centre controls in the countrys auto market.

The 4,700-square-metre facility, in Suzhou, Jiangsu province, will open in the third quarter with the full range of the companys capabilities, including injection moulding, thermoforming, in-mould decorating, painting and assembly, executives from the Glasgow-based company said in an interview at the Chinaplas trade fair, held 17-20 May in Guangzhou.


Commercial director Steve Mathers said the company is investing several million pounds in the factory, and said it would employ between 150 and 200.


It will almost exactly mirror the companys Glasgow headquarters facility, which has about 120 employees, and will include its own localised research and product development staff to tailor offerings for the local market, Mathers said.


Technology transfer is critical to the long-term success of the business, he said, adding that the company plans to have a team specializing in technology transfer. You cant make the assumption that what works in China is the same as in Europe and North America.


The Scottish factory will retain more of the companys new process development capabilities, though, he said.


The Suzhou factory will also have what general manager Lifeng Wang described as the one of the most advanced paint lines in Asia, a highly-automated, energy efficient system.


Products planned for Suzhou include dials and appliqus, fascia assemblies and interior trim moulded parts.


The company has customers in the appliances and telecommunications markets, but automotive is a major driver for the new investment, particularly Chinese automakers who want to improve their cars, Mathers said.


When we first came here we were working with the global Tier One automotive companies, Mathers said. They remain steadfast customers but we are seeing an increasing independence of home brands as they want to draw their brands up the value chain. [They] are looking for much more discerning, technically demanding products.


To help finance the new factory, McGavigan took on a minority investor in December, selling a 37.5% stake in the company to Glasgow-based investment house Maven Capital Partners, Mathers said.


The China facility represents a return of sorts to the local market for the company, which under a previous company structure built a plant in Shanghai in 2006.


At the time, the Scotland facility was part of the American equity firm Riverlake and its Advanced Decorative Systems unit, but the US group fell into financial trouble when the American and European auto markets collapsed in 2008, and it sold the Shanghai facility.


Mathers and former Advanced Decorative CEO David Taylor bought the Scotland operations in 2009.



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