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Reshoring is 'manufacturing moving to where it should be'

By: Frank Esposito

March 13, 2014

WESLEY CHAPEL, FLA. — As the top executive of the North American operations of a Japanese injection molder and auto supplier, Melanie Hart has a unique take on reshoring.

“What we’re seeing is manufacturing moving to where it should be,” Hart said Feb. 25 at the 2014 Plastics News Executive Forum in Wesley Chapel, near Tampa. “It’s going to where it can be successful and profitable.”

“A lot of times, the move [back to North America] is a correction of a bad decision,” added Hart, who serves as president and CEO of Bloomington, Ind.-based Tsuchiya North America. “We located in what we thought were great low-cost countries, but costs rose.”

Tsuchiya North America operates in the region as Tasus Corp., a unit of Nagoya, Japan-based Tsuchiya Co. Ltd. The parent firm has annual sales of $1.1 billion, selling primarily into the automotive market, with Toyota Motor Corp. as its largest customer.

In 2013, Tasus posted sales of $64 million and the company expects to register sales of $75 million in 2014. The firm employs 500 at plants in Indiana, Texas, Alabama and Ontario.

Further expansion in the U.S. is a possibility for Tasus, Hart said, because of the country’s growing population and increasing number of car buyers. Additional capacity also could be built by Tsuchiya in Asia, she added.

Reshoring activity is on a steep upswing in 2014, but Hart described it as “a short-term trend and correction, but not a trend for long-term growth.”

She also cited several conditions that Tasus looks at when deciding where to locate its facilities. These factors included closeness to market, political risk, energy costs and availability of skilled labor.

In the U.S., Hart said that Tasus “shops for a college town … they’re learning communities.” She also advised firms looking to reshore to “go where they’re coming after you … if they don’t, the state next door will.”

Tasus received substantial benefits last year when it built its plant in Florence, Ala. The state of Alabama covered the cost of the land, much of the construction of the 104,000-square-foot facility and additional tax abatements covering the business for 10 years. Northwest Muscle Shoals Community College also stepped up to help fill the training gap, creating an 18-month injection molding program, installing an injection molding machine and robotics.

The plant, which opened in October, initially is focusing on injection molding lighting components for North American Lighting Inc., which has expanded its own production in neighboring Muscle Shoals, Ala. Tasus has a standard development model for all of its production plants — build an initial facility of about 100,000 square feet with space for a 50,000-square-foot expansion — then grow to house 30-35 presses with clamping forces of 150-1,450 tons.

But Hart pointed out that the U.S. “needs to turn around” a situation that has seen the U.S. fall to 7th globally in terms of R&D spending as a percentage of GDP. At 30 percent, the U.S. now trails Korea, Japan and Switzerland in that measurement.

“For a valued good, it’s all about hiring more heads than hands, she said.