Sumitomo Heavy Industries Ltd., the Japanese-based maker of injection molding machines, plans to begin building small-tonnage presses next year at a 40,000-square-foot factory in Georgia.
Sumitomo joins Ube Industries Ltd. and Mitsubishi Heavy Industries Ltd. as Japanese injection press makers that have set up U.S. assembly plants in recent years.
Sumitomo's U.S. operation, SHI Plastics Machinery Inc. of America of Norcross, Ga., announced the news Dec. 8. SHI operates under the name Sumitomo Plastics-Machinery. The company is spending $10 million on the factory, which will do complete fabrication of machine bases, machine platens and other parts, form sheet metal and paint the machines.
Sumitomo plans to break ground in January for the factory in Jefferson, Ga., about 60 miles north of Atlanta.
Initially, the factory will employ about 25. Production capacity will be 20 presses per month, Sumitomo said.
``Sumitomo is establishing a North American manufacturing base for our smaller general-purpose machines,'' said Koji Shintani, president of Sumitomo Plastics-Machinery. The U.S. plant will build SH series machines ranging in clamping force from 55-165 tons.
SHI said the Jefferson facility will operate as a separate company, developing its own sources worldwide for components. The only subassemblies brought in from Sumitomo Heavy Industries in Chiba, Japan, will be the plasticizing units and controllers.
Sumitomo Plastics-Machinery has taken a much higher U.S. profile in recent years. The Georgia firm booked orders for 350 machines in 1997, more than three times the number sold five years ago.
On its home front, Sumitomo wants to grab 15 percent of the market in Japan, up from 12 percent today, and catch up to the No. 1 builder in Japan, Nissei Plastic Industrial Co. Ltd. Sumitomo said it sold 1,500 presses in fiscal 1996 and should sell 2,000 in 1997. By the year 2000, the company expects to produce 2,200 machines.
In comparison, at NPE 1997 in Chicago, Nissei President Tsukasa Yoda said Nagano-based Nissei expected to sell more than 3,600 injection presses in 1997.
Jerry Boggs, vice president of Sumitomo's U.S. operation, said: ``Now is obviously the right time to start building machines here.''
Executives of Ube and Mitsubishi agreed, but they cautioned that finding good domestic suppliers is a challenge.
``For Sumitomo, I think it's a good decision,'' said Toshiaki Kaku, president of Ube Machinery Inc. in Ann Arbor.
In mid-1996, Ube began making midsized and large-tonnage presses at its $5 million Ann Arbor factory. Kaku said Ube built about 30 presses in Michigan in 1997. The company hopes to make 70-80 machines per year there by 2000.
Kaku said the Ube machine now has close to 70 percent U.S. content. ``We've improved the design of the machine to utilize more U.S. components,'' he said.
Kaku said Michigan's central location in the industrial Midwest was a big reason Ube picked Ann Arbor — something he said could be more difficult in Georgia.
``Most important is the quality of suppliers. The main reason why we have our plant here in Michigan is there are good vendors. Also, it's the center of our market,'' he said.
Mitsubishi began producing presses in Hopkinsville, Ky., in 1995. The plant assembled about 80 machines in 1997 and hopes to reach 100 per year in 1998, said Minoru Shibata, executive vice president of MHI Injection Molding Machine Inc. of Wood Dale, Ill.
``The biggest problem is a stable supply from vendors, on time,'' Shibata said of Mitsubishi's U.S. manufacturing experience.
Another major Japanese supplier, Toshiba Machine Co. Ltd., has been studying whether to set up U.S. production. No decision has been made, said Tim Glassburn, vice president at Toshiba's U.S. operation in Elk Grove Village, Ill.
Sumitomo's Shintani said the Georgia factory ``will help minimize the effect of yen-dollar fluctuations and solidify our foundation for continuing growth here.''
For several years, a soaring yen has punished importers of Japan-made injection molding presses, forcing them to raise prices. However, in recent months, that scenario has flip-flopped, with the yen falling against the dollar, making imported machines much cheaper.
Shintani said the $10 million factory ``is representative of Sumitomo's long-term commitment to the North American market.'' Sumitomo officials were not available for comment beyond the news release.
Sumitomo's current U.S. headquarters in Norcross, and offices in Cincinnati and Los Angeles, will continue to house sales, service, training, spare parts and technical centers. Overall, the company sells injection molding machines in clamping forces from 20-716 tons.
Glassburn, of rival Toshiba, said Sumitomo has become more aggressive in North America. ``They've come on pretty strong in the last couple of years,'' he said. ``Years ago, you didn't hear much about them.''