Cleanpak expands to China by acquiring cleanroom manufacturing company

04/01/2004

BY MARK A. DeSORBO

PORTLAND, Ore.—Cleanpak International Inc., a cleanroom and air-handling equipment supplier, has expanded to China by acquiring Nanjing Purification Factory (NPF), a cleanroom manufacturing and construction company owned by Nanjing Electrical Machinery and Industrial Group (NEMIG).

The newly formed joint venture, Cleanpak Asia Nanjing Purification Systems Co. (Cleanpak Asia), will immediately take over operations of NPF, maintaining current product and service offerings while adding the higher technology products and services of Cleanpak International. Current NPF product and service offerings include engineer-to-order pharmaceutical and electronics ISO Class 5 to ISO Class 7 cleanroom environment design, manufacturing, installation and certification.

Cleanpak officials say assets from both companies will be combined, and local talent and expertise in clean environment engineering and manufacturing will be retained to meet the growing needs of the Chinese cleanroom and construction market.

"We have been working on this for a year, and this will help ensure the future of Cleanpak," says Erik Krieger, chairman of Cleanpak International.

China is entering an era in which new standards for clean environments will be required over a broader market base, and Kreiger says Cleanpak Asia plans to capitalize on those needs as well as the capabilities to deliver products and services to meet the evolving economy's new, higher standards. Kreiger adds that the company is "extremely bullish" on the advances being made within the Chinese clean manufacturing environments.

"We are very encouraged by what we see developing over there," he says. "This is being driven by Japanese, Taiwanese, U.S., and European manufacturers, principally semi and pharmaceutical manufacturers, as well as electronic manufacturers. They are not necessarily moving in with older technology. They are moving in with newer technologies, and that requires much cleaner environments."

Cleanpak has been a contributor to building some of the cleanest manufacturing environments in the world for such heavyweights as Intel, Motorola, IBM and Micron. Now, it is poised to bring its expertise to the burgeoning China marketplace.

China, Kreiger says, is operating on a different scale. Manufacturers are not using air-handling, cleanroom systems or designs as advanced as those in the U.S. and Europe. Consequently, the types of products that are sold into the Chinese marketplace often differ from what is sold domestically.

"If you took advanced products there, you wouldn't make any money," he says. "We entered China with a product that will fit the market now. Over the long term, China will evolve and use technologies like those in the United States and Europe."

Wang Jian Ping, director and principal owner of NTPT, has managed operations at NPF for the past nine years and can attest to the evolution. "We have seen the domestic purification market grow 10 percent per year over the past few years, and expect growth to continue at this rate for the next 10 years," he says. "As higher quality and technology requirements are expected in the market moving forward, many low-end suppliers will need a drastic change or will fail. The low end-market of the past had low-entry barriers that created many start-up companies competing for these projects."

Cleanpak Asia will operate from its headquarters in the Nanjing Free Port Development Zone. Located near a deep-water port on the Yangtze River, Cleanpak Asia's 100,000-square-foot facility, constructed in early 2000, was designed specifically to house the business offices and manufacturing workshops for cleanroom equipment production.

Cleanpak Asia will retain more than 130 engineers, manufacturing and construction technicians, and sales and administrative staff from NPF.