Skip to main content
Sister Publication Links
  • Sustainable Plastics
  • Rubber News
Subscribe
  • Login
  • Register
  • Subscribe
  • News
    • Processor News
    • Suppliers
    • More News
    • Digital Edition
    • End Markets
    • Special Reports
    • Newsletters
    • Resin pricing news
    • Videos
    • Injection Molding
    • Blow Molding
    • Film & Sheet
    • Pipe/Profile/Tubing
    • Rotomolding
    • Thermoforming
    • Recycling
    • Machinery
    • Materials
    • Molds/Tooling
    • Product news
    • Design
    • Mergers & Acquisitions
    • Sustainability
    • Public Policy
    • Material Insights Videos
    • Numbers that Matter
    • Automotive
    • Packaging
    • Medical
    • Consumer Products
    • Construction
    • CEO Issue
    • Diversity
    • Best Places to Work
      • 2022 winners
    • Processor of the Year
    • Rising Stars
    • Women Breaking the Mold
  • Opinion
    • The Plastics Blog
    • Kickstart
    • One Good Resin
    • BRICS and Plastics
    • All Things Data
    • Viewpoint
    • From Pillar to Post
    • Perspective
    • Mailbag
    • Fake Plastic Trees
  • Shop Floor
    • Blending
    • Compounding
    • Drying
    • Injection Molding
    • Purging
    • Robotics
    • Size Reduction
    • Structural Foam
    • Tooling
    • Training
  • Events
    • Plastics News Events
    • Industry Events
    • Injection Molding & Design Expo
    • Livestreams/Webinars
    • Editorial Livestreams
    • Ask the Expert
    • Plastics News Events Library
    • Processor of the Year submissions
    • Plastics News Executive Forum
    • Injection Molding & Design Expo
    • Plastics News Caps & Closures
    • Women Breaking the Mold Networking Forum
    • Plastics in Automotive
    • Injection Molding & Design Expo
    • Reuters Responsible Business Europe 2022
    • Reifenhäuser Technologies Livestreams
    • Polymer Points Live
    • Numbers that Matter Live
    • Plastics in Politics Live
    • Sustainable Plastics Live
    • Plastics Caps & Closures Library
    • Plastics in Healthcare Library
    • Women Breaking the Mold Networking Forum Library
  • Resin Prices
    • All Resins
    • Commodity TPs
    • High Temp TPs
    • ETPs
    • Thermosets
    • Recycled Plastics
    • Historic Commodity Thermoplastics
    • Historic High Temp Thermoplastics
    • Historic Engineering Thermoplastics
    • Historic Thermosets
    • Historic Recycled Plastics
  • Rankings & Data
    • Injection Molders
    • Blow Molders
    • Film Sheet
    • Thermoformers
    • Pipe Profile Tubing
    • Rotomolders
    • Mold/Toolmakers
    • LSR Processors
    • Recyclers
    • Compounders - List
    • Association - List
    • Plastic Lumber - List
    • All
  • Directory
  • Custom
    • Sponsored Content
    • Conair Sponsored Content
    • KraussMaffei Sponsored Content
    • ENGEL Sponsored Content
    • White Papers
    • Classifieds
    • Place an Ad
    • Sign up for Early Classified
MENU
Breadcrumb
  1. Home
  2. News
May 15, 1995 02:00 AM

TV PRICE WARS FORCE MOLDERS TO CUT COSTS

Roger Renstrom
  • Tweet
  • Share
  • Share
  • Email
  • More
    Print

    Custom molders of plastic television cabinets are being forced to lower their costs aggressively to keep pace with the steady price cutting at the retail level. The competition is driving plant openings, relocations and closings as molders move closer to original equipment manufacturers. The goal: to minimize distances to ship the bulky plastic cabinets and avoid interruptions in the annual assembly of 25 million direct-view color TV receivers for the U.S. market.

    ``Transportation of parts isn't that easy,'' said J. Luis Z£¤iga, senior vice president and director general of Video Tec de Mexico SA de CV. ``It's expensive because we ship TV cabinets filled with air. It's not a dense product.''

    Video Tec is the Sony Electronics Inc. maquiladora in Tijuana, Mexico.

    Carlos De Orduna, senior adviser at Sanyo North America Corp. in San Diego, observed about proximity: ``Any place in the U.S. is fine, but the recom-mendation is that you better benear me.''

    Daiho Industrial Co. Ltd. of Osaka, Japan, is the newest participant in the rush for new capa-city close to its customers. The custom molder is buying 10 acres in Tijuana and plans to build a 200,000-square-foot facility, according to Joe Smith, senior vice president of John Burnham & Co., a San Diego real estate firm.

    Daiho is a supplier to Casio and Matsushita and, in Japan, has a relationship with Sanyo. Daiho expects to acquire the land by early June.

    In the TV industry, major players Thomson Consumer Electronics Inc. and Zenith Electronics Corp. mold most of their plastic cabinets in-house. Seven West Coast TV assembly operations with Asian origins, however, rely on nearby custom molders in Tijuana and Southern California.

    TV assemblers in Tijuana include units of Japanese companies Sony, Sanyo, Hitachi and Matsushita/Panasonic - JVC arrives next year - and South Korean companies Daewoo and Samsung.

    Another Korean firm, Gold Star, is nearby in Mexicali.

    While Zenith and Thomson tend to operate in Western ways, companies with Asian ties tend to follow oriental culture, according to Sony's Z£¤iga.

    The Western and Eastern cultural approaches ``have been different but will merge as companies become global in their outlooks,'' Z£¤iga said. More sophistication is emerging in border-oriented TV manufacturing, Z£¤iga said, making companies competitive with China and Malaysia.

    He expects maquiladoras to be ``the vehicle for introduction of technology to Central and South America.''

    Already, Sony's marketing to that region has increased production of its premium TV sets, according to Andrew Hilliard, vendor development manager in Sony's 2,000-employee San Diego manufacturing center.

    ``The average consumer therecannot aspire to purchase real estate or an automobile, but can aspire to purchase a TV or a VCR,'' he said.

    Video Tec will employ more than 5,000 this year in its 575,000 square feet of facilities, but no molders, Z£¤iga said. Sony's largest custom molder is Kyowa America Corp. of Costa Mesa, Calif.

    Among Kyowa's other customers is Hitatchi Home Electronics (America) Inc.

    Kyowa expects to pick up business from Hitatchi this year when the OEM's Canadian unit, Hitatchi (HSC) Canada Inc., shuts down production in Pointe-Claire, Quebec.

    ``The consolidation benefits Kyowa from a communications and transportation standpoint,'' said Andrew Schmidt, sales supervisor.

    Kyowa currently ships cabinets to Pointe-Claire.

    ``It is cheaper to produce in Mexico rather than Canada,'' he said.

    Kyowa maquiladora Kyomex SA de CV opened in 1990, employs 325 and just doubled itsspace to 110,000 square feet.

    ``When we located there, it was difficult to get land and the necessary permits,'' Schmidt said.

    Kyomex leases the land and owns the building; most companies now entering the market buy their land.

    Kyomex operates six machines with clamping forces of 500-850 tons and has two 350-ton and one 650-ton Toshiba presses on order, according to Mike Araki, executive vice president and general manager.

    Kyowa, a unit of Kyowa Electric & Chemical Corp. of Tokyo, employs 340 at molding facilities in Costa Mesa and Irvine, Calif., and 65 at an operation in Pittsburgh.

    Like Hitatchi, Mitsubishi Electric Corp. also is closing an assembly plant in Canada andmoving operations in June to a subsidiary in lower-cost area: Braselton, Ga.

    ``To be effective, companies need to standardize sizes, grouptogether and take advantage of large-volume markets,'' said Chris Bell, senior buyer for Mitsubishi Electric Sales Canada Inc.

    ``With the competitiveness, I can see relocations continuing.''

    Bell expects its molders to follow Mitsubishi to Georgia.

    ``Ideally, any TV facility would like all suppliers to be in close proximity to assembly operations,'' he said.

    Addison, Ill.-based custom molder Mulay Plastics Inc. heeded the invitation from customers to enter the Tijuana market, buying six acres and breaking ground March 21 for a facility that is 350 miles closer to assemblers than a Mulay plant in Casa Grande, Ariz.

    Mulay and Engineered Specialty Plastics Inc. of Hot Springs, Ark., will retain the TV cabinet and back cover molding work of Sanyo Industries Canada Inc. - but in a new location.

    In a cost-cutting move, a Montreal plant closes in June, and production moves to Sanyo Manufacturing Corp. in Forest City, Ark.

    Harvey Bright, president and chief executive officer of Engineered Specialty Plastics, said the move from Canada helps both Sanyo and his company.

    ``Freight is a big issue, and I'm two hours away from Sanyo,'' he said.

    ESP, which operates 30 presses with clamping forces of 45-1,500 tons, is a unit of Engineered Support Systems Inc. in Olivette, Mo.

    Another competitor, Dalton, Ga.-based molder Munekata America Inc., said it is planning a Tijuana facility to supply manufacturers of TV sets and office machines. Munekata is a unit of Munekata Co. Ltd. of Osaka, Japan.

    Observers say the current flurry is cost-driven and has little to do with the 1994 implementation of the North American Free Trade Agreement. NAFTA eases border issues among Canada, the United States and Mexico, and ultimately encourages Asian and European producers to increase their products' local content as a way to bypass future North American tariff barriers.

    RECOMMENDED FOR YOU
    Numbers That Matter Live
    Letter
    to the
    Editor

    Do you have an opinion about this story? Do you have some thoughts you'd like to share with our readers? Plastics News would love to hear from you. Email your letter to Editor at [email protected]

    Most Popular
    1
    Two plastic container companies cut jobs
    2
    Armstrong may lay off more than 600
    3
    Obituary: Joseph Prischak, Plastek founder, Hall of Famer
    4
    Financing for Novolex highlights the company's greenhouse gas reduction efforts
    5
    House Democrats try again on pellet legislation
    SIGN UP FOR TO RECEIVE THESE EMAILS AND ENEWSLETTERS
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please verify captcha.

    Please select at least one newsletter to subscribe.

    Get our newsletters

    Staying current is easy with Plastics News delivered straight to your inbox, free of charge.

    Subscribe today

    Subscribe to Plastics News

    Subscribe now
    Connect with Us
    • LinkedIn
    • Facebook
    • Twitter
    • Instagram

    Plastics News covers the business of the global plastics industry. We report news, gather data and deliver timely information that provides our readers with a competitive advantage.

    Contact Us

    1155 Gratiot Avenue
    Detroit MI 48207-2997

    Customer Service:
    877-320-1723

    Resources
    • About
    • Staff
    • Editorial Calendar
    • Media Kit
    • Data Store
    • Digital Edition
    • Custom Content
    • People
    • Contact
    • Careers
    • Sitemap
    Related Crain Publications
    • Sustainable Plastics
    • Rubber News
    • Urethanes Technology
    • European Rubber Journal
    • Tire Business
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Copyright © 1996-2022. Crain Communications, Inc. All Rights Reserved.
    • News
      • Processor News
        • Injection Molding
        • Blow Molding
        • Film & Sheet
        • Pipe/Profile/Tubing
        • Rotomolding
        • Thermoforming
        • Recycling
      • Suppliers
        • Machinery
        • Materials
        • Molds/Tooling
        • Product news
        • Design
      • More News
        • Mergers & Acquisitions
        • Sustainability
        • Public Policy
        • Material Insights Videos
        • Numbers that Matter
      • Digital Edition
      • End Markets
        • Automotive
        • Packaging
        • Medical
        • Consumer Products
        • Construction
      • Special Reports
        • CEO Issue
        • Diversity
        • Best Places to Work
          • 2022 winners
        • Processor of the Year
        • Rising Stars
        • Women Breaking the Mold
      • Newsletters
      • Resin pricing news
      • Videos
    • Opinion
      • The Plastics Blog
      • Kickstart
      • One Good Resin
      • BRICS and Plastics
      • All Things Data
      • Viewpoint
      • From Pillar to Post
      • Perspective
      • Mailbag
      • Fake Plastic Trees
    • Shop Floor
      • Blending
      • Compounding
      • Drying
      • Injection Molding
      • Purging
      • Robotics
      • Size Reduction
      • Structural Foam
      • Tooling
      • Training
    • Events
      • Plastics News Events
        • Plastics News Executive Forum
        • Injection Molding & Design Expo
        • Plastics News Caps & Closures
        • Women Breaking the Mold Networking Forum
        • Plastics in Automotive
      • Industry Events
        • Injection Molding & Design Expo
      • Injection Molding & Design Expo
      • Livestreams/Webinars
        • Reuters Responsible Business Europe 2022
        • Reifenhäuser Technologies Livestreams
      • Editorial Livestreams
        • Polymer Points Live
        • Numbers that Matter Live
        • Plastics in Politics Live
        • Sustainable Plastics Live
      • Ask the Expert
      • Plastics News Events Library
        • Plastics Caps & Closures Library
        • Plastics in Healthcare Library
        • Women Breaking the Mold Networking Forum Library
      • Processor of the Year submissions
    • Resin Prices
      • All Resins
      • Commodity TPs
        • Historic Commodity Thermoplastics
      • High Temp TPs
        • Historic High Temp Thermoplastics
      • ETPs
        • Historic Engineering Thermoplastics
      • Thermosets
        • Historic Thermosets
      • Recycled Plastics
        • Historic Recycled Plastics
    • Rankings & Data
      • Injection Molders
      • Blow Molders
      • Film Sheet
      • Thermoformers
      • Pipe Profile Tubing
      • Rotomolders
      • Mold/Toolmakers
      • LSR Processors
      • Recyclers
      • Compounders - List
      • Association - List
      • Plastic Lumber - List
      • All
    • Directory
    • Custom
      • Sponsored Content
      • Conair Sponsored Content
      • KraussMaffei Sponsored Content
      • ENGEL Sponsored Content
      • White Papers
      • Classifieds
        • Place an Ad
        • Sign up for Early Classified