Japanese injection press maker Nissei Plastic Industrial Co. Ltd. plans to set up an assembly plant in western Asia to handle growing demand in India, Pakistan and other regional markets.
Japanese manufacturers, including automobile and electronics makers, are investing more there, and the region could have manufacturing advantages globally as China's costs continue to rise, said Nissei President Hozumi Yoda.
Details are not final, but Yoda said Nagano, Japan-based Nissei probably will begin with a small assembly plant.
A formal announcement could come as early as March, he said in a Nov. 18 interview at the Dongguan International Mould, Metalworking, Plastics, Packaging & Rubber Exhibition, also known as the DMP show.
Beyond rising local demand, he said the decision to set up production in western Asia is also influenced by steep Indian tariffs of up to 223 percent on injection presses imported from China, where Nissei already has a factory. Yoda stressed that the company has not decided if the new factory will be built in India.
Yoda said he believes the west Asia region could become a significant manufacturing center, particularly in lower-cost or simpler goods, as China did when it began its rapid industrialization 30 years ago.
“Labor costs in west Asia are very cheap,” he said. He predicts manufacturers there could export simple products to China. Some Chinese press makers are also targeting the region, he said.
Nissei, one of Japan's largest press makers, set up a manufacturing plant in China in 2009, its first outside Japan. The machines it will make in western Asia will be simpler than the Chinese models, as the larger demand in that part of Asia now is for less-sophisticated machines, Yoda said.
“We will make more-competitive machines in west Asia,” he said. “The machines we are making now in [China] are too high-end [for mass demand in west Asia].”
In China, customers are increasingly looking for more automated equipment as labor costs rise substantially, and Nissei believes its background in selling complete machine systems leaves it positioned for China's new demands, Yoda said.
“Now China is doing the same thing as 20 years ago in Japan,” Yoda said.
The firm will sell about 300 machines this year from its China factory, in Taicang, and is looking to double that figure next year, and reach 900 machines from Taicang in 2013.
A west Asia factory would represent a continued evolution in Nissei's manufacturing strategy.
The firm was slower than some of its Japanese rivals to set up manufacturing in China, preferring to keep it all in Japan.
But with the rapid changes in the machinery market in the last few years, Nissei's strategy now calls for manufacturing directly in emerging markets. Yoda called it an evolution from “Made in Japan” to “Made by Japan,” with what he called the same standards used in Japan applied to factories in new markets.
At the DMP show, the company was exhibiting two all-electric models from the Taicang factory, including an 80-ton NEX model with a 240-cavity mold of LED bases that proposes using a horizontal molding machine in a hoop molding system.
Such systems typically use vertical machines since it is easier to design pre- and post-press processes around them, but Nissei said it is pushing horizontal machines as a solution in that niche.
Nissei also exhibited a 140-ton DCE series for making thin-walled soup cups, using two-color molding of dissimilar materials.