The global economic downturn has pushed Japanese injection press maker Nissei Plastic Industrial Co. Ltd. to significantly boost capacity for its planned Chinese factory, its first manufacturing facility outside Japan.
Nagano-based Nissei said the facility in Taicang will make 300 machines in 2010 and 600 in 2011, more than double the 180 machines the company said in 2008 that it would produce in China.
The facility, slated to open in October, will help the company capitalize on growing demand in mainland China and avoid the threat of high tariffs on imported molding machines, Nissei President Hozumi Yoda said in an e-mail.
Yoda's comments suggest China is becoming a larger part of Nissei's footprint.
Nissei this year cut its headquarters staff by 200, and has seen production fall to an annualized pace of 1,500 machines, Yoda said. The company said, before the economic crisis, that it made about 3,600 a year.
The global economy changed Nissei's thinking, he said.
At the same time [Nissei trimmed Japanese operations], the Chinese government began to increase domestic demand as part of the economic stimulus plan, he said. Value-added tax rebates on white goods and automobiles began to flow, and the industry perception [of China] began to significantly change from the factory of the world to Chinese domestic demand.
He said the company goal is simple: to ensure a structure in which significant changes in import-duty laws related to molding machines could be best accommodated in the future by making things in China that are going to be sold in China.
He said the target of 300 machines in China in 2010 depends on the economy, but the goal of 600 machines in 2011 is not a far-fetched number. The company is not going after scale in China, and it is very important to maintain the same quality in China as it has in Japan, he added.
He also suggested production outside Japan will be increasingly important for the firm's general-purpose markets. Nissei was in some ways more hesitant than other Japanese rivals to set up production overseas.
In the future, production sites will be essential in markets that could expect a certain amount of volume, mainly with our general-purpose machines, he said. It is essential that we design [a standard production facility] that improves the maximum production efficiency with minimum scale, employees, and the fastest tact. Currently, we are in the progress of making that happen.
The 49,000-square-foot China facility, with about 36,000 square feet of factory space, will initially assemble components from Japan, but Nissei said it will increasingly use local components starting next year, to lower costs.
Nissei also said it will consider exporting machines from China in the future.
The company plans to make several models in Taicang, including four versions of its NEX electric presses, from 50-180 tons, and four models of its hybrid PNX and FNX series, with clamping forces of 40-180 tons.
The plant will start with 27 employees, with total employment projected at 90 by 2011.
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