V.S. Industry plans to build molding factory in Indonesia

By Steve Toloken
Staff Reporter / Asia Bureau Chief

Published: April 16, 2012 6:00 am ET

Related to this story

Topics Consumer Products, Injection Molding, NPE 2012

ORLANDO, FLA. (April 16, 2 p.m. ET) — Malaysia’s V.S. Industry Bhd. is building a new injection molding factory in Indonesia to meet increased demand from multinational electronics manufacturers there, as the company says rising costs in China are starting to shift work from that country.

It would be the first injection molding plant in Indonesia for V.S. Industry, which has more than 1,500 injection presses in factories in China, Vietnam and Malaysia. It’s in response to its multinational electronics customers, including Seiko Epson Corp., who want to do more manufacturing in the country, company executives said.

“They have been encouraging us to set up plastic molding in Indonesia to be one-stop,” said Nick Lim, senior manager of marketing for the Senai, Malaysia-based firm, in an interview at NPE2012. V.S. currently has a printed circuit board manufacturing factory in Indonesia.

The new factory, to be located outside Jakarta, is under construction and scheduled to open in mid-2013 with 50 Japanese and Chinese injection molding machines and about 200 employees, he said.

Lim said the new investment is partly related to rising costs in China, as multinationals seek to diversify their manufacturing base away from China. But he said it’s also in response to other molding opportunities in Indonesia’s domestic market.

In China, the company has been downsizing its workforce in recent years as labor costs have been rising at double-digit annual rates.

The company, for example, had 12,000 employees at a massive molding and assembly manufacturing complex in Zhuhai, China, in 2008, but has reduced that to 8,000 employees today, Lim said.

In its most recent annual report, covering its 2011 fiscal year, the publicly listed company said, “The year under review saw the [electronics manufacturing services] sector in China facing tremendous internal and external pressures, arising from higher labor costs and a more competitive landscape as customers began to shift their manufacturing requirements to other low-cost countries in the region.”

V.S. said it is one of the 50 largest electronics contract manufacturing companies in the world.

Lim said the manufacturing cost gap between China and the headquarters plant in Malaysia, where V.S. has 350 injection molding machines, has narrowed dramatically in recent years.

China’s total manufacturing cost used to be 30-40 percent cheaper, but today, the country is only 10 percent cheaper than Malaysia, Lim said.

In Indonesia, Lim said V.S. also anticipates business making plastic components for the American company Itron Inc., which manufactures electric meters there for the Indonesian market.

The company exhibited at NPE2012, held April 1-5 in Orlando.


Comments

V.S. Industry plans to build molding factory in Indonesia

By Steve Toloken
Staff Reporter / Asia Bureau Chief

Published: April 16, 2012 6:00 am ET

Post Your Comments


Back to story


More stories

Image

How CEO Santi is changing ITW

April 23, 2014 2:48 pm ET

Scott Santi is showing he can do more than just cut costs at Illinois Tool Works Inc.    More

Image

Unilever puts Dove brand on a MuCell diet

April 23, 2014 1:57 pm ET

New technology employed by Unilever NV in the manufacture of bottles for its Dove Body Wash range of products could end up saving the brand owner up...    More

Image

Coffee roaster looks to improve footprint of single cup systems

April 22, 2014 1:30 pm ET

One of the largest coffee and tea manufacturers in North America has introduced a single-serve beverage capsule intended to curb the waste created by ...    More

Image

German electronics firm expanding in Hungary

April 22, 2014 9:46 am ET

German electronics manufacturer Provertha GmbH has announced plans to set up a new plastic galvanizing plant at the Kapuvár Industrial Park, in...    More

Image

Inventor taps into TV exposure, crowd funding for water bottle project

April 21, 2014 3:26 pm ET

An Australian inventor has developed a reusable plastic water bottle with a filter in a bid to get more people to drink tap water instead of buying di...    More

Market Reports

Market Data Book - Rankings & Lists

A one-stop download of Plastic News' exclusive annual lists and processor rankings containing essential data including sales, employees, end markets, materials and more.
EXCLUSIVE EXCEL FEATURE: full mailing address details for available plant locations.

Learn more

Thermoformed Packaging 2014 Market Review & Outlook – North America

This in-depth report provides analysis and discussions of economic and political conditions, market trends, legislative/regulatory activity impacting supply and demand, business opportunities and threats, materials pricing, manufacturing technology, as well as strategies being implemented by thermoformed packaging companies. In addition, there are reviews of 25 leading thermoformers in the packaging segment, assessing their growth initiatives and performance metrics over 10 years.

Learn more

Mold Making and Tooling Review and Outlook 2014 – North America

This report provides in-depth analysis of the mold and toolmaking market for North America, including discussions of trends, opportunities, threats, the latest developments in production and labor and equipment trends impacting moldmakers.

Learn more

Upcoming Plastics News Events

May 6, 2014 - May 8, 2014Plastics in Medical Devices 2014

May 12, 2014 - May 12, 2014Plastics News Brazil Pharma Summit

September 10, 2014 - September 12, 2014Plastics Caps & Closures 2014

February 3, 2015 - February 7, 2015Plastics News Executive Forum 2015

More Events