Business Facilities - Siting for plastics -
[Cached Version]
Published on: 6/1/2004
Last Visited: 7/9/2004
The cost of freight has become a huge factor weighing in to the overall cost analysis," says Wayne Donohue, Vice President of GI Plastek."To be competitive, you must be relatively close to your customer."GI Plastek is a leading Reaction Injection Molding (RIM) supplier of very large parts for agriculture equipment, like tractors, and shipping is very expensive due to the size of the product.The company needs to be within 500 miles of its customers, or it loses competitiveness.It has production facilities in Ohio, Massachusetts, New Hampshire, and Iowa.
"If your plastic products typically require painting, this should be a consideration as the location of the paint facility needs to be very close to the molding facility, if not under the same roof," continues Donohue."These are some of the hidden costs when considering a new location.The next factor would be the area of economics.Considerations of local area pay rates and overall compensation packages become critical.Molding is an extremely competitive business and you must watch the costs very close up front."
Donohue adds that "one last, but not final consideration is aggressive economic development assistance for training and grants.