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

Comar merging with Convergence Packaging

October 21, 2014 5:07 pm ET

A couple of plastic packaging companies owned by private investment firm Graham Partners are merging into a single entity.    More

Image

BASF targets coffee and automotive connoisseurs with new resin grades

October 21, 2014 2:07 pm ET

BASF SE is using polybutylene terephthalate (PBT), which is normally used to manufacture high-end electronics, in a food consumer packaging product.    More

Image

Report: Suspected former Nazi with plastic connection collecting Social Security

October 20, 2014 3:52 pm ET

AKRON, OHIO — A one-time plastics executive in Akron is among dozens of suspected former Nazis who have been collecting U.S. Social Security...    More

Molder expands in France with new clean room

October 20, 2014 1:30 pm ET

Global Closure Systems (GCS), a global injection molding producer, showed off its new ISO 7 clean room at its Astra Plastique factory in France...    More

Molder goes to auction block

October 17, 2014 12:17 pm ET

An Illinois custom injection molding operation will be auctioned off after its owner decided to close the business.    More

Market Reports

Plastics Recycling Trends in North America

This report is a review and analysis of the North American Plastics Recycling Industry, including key trends and statistics based on 2013 performance. We examine market environment factors, regulatory issues, industry challenges, key drivers and emerging trends in post-consumer and post-industrial recycling.

Learn more

Plastics in Mexico - State of the Industry Report

This report analyzes the $20 million dollar plastics industry in Mexico including sales of machinery & equipment, resins and finished products.

Our analysts provide insight on business trends, foreign investment, top end markets and plastics processing activity. The report also provides important data on exports, production, employment and value of plastics products manufactured.

Learn more

Plastics Caps & Closures Market Report

The annual recap of top trends and future outlook for the plastics caps & closures market features interviews with industry thought leaders and Bill Wood’s economic forecast of trends in growing end markets. You will also gain insight on trends in caps design, materials, machinery, molds & tooling and reviews of mergers & acquisitions.

Learn more

Upcoming Plastics News Events

January 14, 2015 - January 14, 2015Plastics in Automotive

February 4, 2015 - February 6, 2015Plastics News Executive Forum 2015

June 2, 2015 - June 3, 2015Plastics Financial Summit - Chicago 2015

September 16, 2015 - September 18, 2015Plastics Caps & Closures - September 2015

More Events