Precision plastics maker expects 2010 growth; big conservation project

[caption id="attachment_19314" align="alignleft" width="314" caption="Labcon just purchased this 25,000-square-foot building on Lakeville Highway in Petaluma."][/caption]

PETALUMA – Labcon North America has purchased the Petaluma building it moved into seven years ago.

"We've been wanting to do this for some time," said Labcon President Jim Happ. "It underlines our commitment to remain in Sonoma County."

Labcon’s parent company, Helena Laboratories, is located in Beaumont, Texas, but Labcon has resisted moving from Northern California.

The 51-year-old, 200-employee maker of precision plastics moved north from Marin County when it ran out of space in 2003, leasing part of the 125,000-square-foot space on Lakeville Highway, which it just bought for $7.6 million.

[caption id="attachment_19315" align="alignright" width="313" caption="The Labcon Eclipse pipette filler is the only bioplastic, compostable product on the market."][/caption]

Labcon has flourished in Sonoma County, building its product line to 1,300 finished goods with 200 distributors world wide, said Mr. Happ. It has sales of about $30 million.

The company sells its pipette tips and other precision molded plastic laboratory equipment to Amgen, Perkin Elmer, Millipore and Monsanto, among others.

Buying the building was one of three major moves forward for Labcon, said Mr. Happ.

"We recently completed a major energy conservation project, reducing our energy use by 25 percent even as we increased production two and a half times," he said.

The savings were achieved by replacing the air conditioning system with a cooling tower and passive thermal cooling system, and replacing hydraulic welders with super-efficient electric welding machines, which use 60 percent less power and are far better suited to the production of medical supplies.

In addition, Labcon worked with bioplastics pioneer Metabolix to develop Mirel, a form of biodegradable plastic that is grown in the cells of reengineered plants.

[caption id="attachment_19313" align="alignleft" width="188" caption="Jim Happ, Labcon president"][/caption]

"We're making biodegradable medical packaging that's so strong it can be steam-sterilized up to 10 times, and yet break down completely in garden compost in just a few months," he said.

The growing popularity of earth-friendly, disposable laboratory supplies in North America and Europe, plus the ballooning cost of petroleum-based plastics bodes well for Labcon and other forward-looking manufacturers.

The world-wide market for lab disposables, Labcon's traditional product, is now at $850 million. Bioplastics could capture 20 percent of the global market in less than five years, said Jeff Bishop, an independent analyst at Beacon Equity Research in San Francisco.

China is not yet ready for biodegradables, said Mr. Happ, although Labcon has just signed with a large distributor there for its disposable lines.

"Within five years we'll probably have our own manufacturing operation there in addition to the one in Sonoma County," he said. "We wanted to buy our building first."

Labcon doesn't disclose revenues, but Mr. Happ said he expects double digit growth in 2010.

"We had 2 percent growth in 2009, for which we were grateful, given the state of the economy," he said.

Labcon is one of a cluster of precision plastics companies in the North Bay, including SMC Stoesser in Santa Rosa; Thermo Fisher Scientific, newly consolidated into a former telecom space on McDowell Boulevard in Petaluma; and Sutter Instrument Co. in Novato.

The area has a reputation for high-quality precision molding, said Mr. Happ, with a robust labor pool and three major universities to draw on.

"When our clients hear where we're located, they want to come visit us," he said.