TOKYO (Oct. 26, 3:30 p.m. ET) — Japanese injection press maker Toshiba Machine Co. Ltd. plans to establish a factory in Thailand, although the disastrous floods sweeping the country have delayed the startup.
Tokyo-based Toshiba had planned to start the facility this month but late last week flood water engulfed the factory, near Bangkok, delaying the startup until at least November, said Koji Egashira, a group manager of the injection molding machines department.
Egashira spoke Oct. 26 at the International Plastic Fair, held Oct. 25-29 in Tokyo.
Toshiba's investment is part of a trend of increased Japanese plastics machinery building in new markets in Southeast Asia and India, both to tap local demand and as a hedge against rising costs and difficulties in China, where Japanese firms have invested heavily in recent years as a lower-cost manufacturing option.
Also at IPF, fellow Japanese injection press maker Sodick Plustech Co. Ltd. said it had opened an injection press factory in March in the Bangkok metro area, and planned to make 40 to 50 machines a month.
But that factory has also had to shut down because of the flooding in Bangkok, and could take several months to reopen, said Shigeru Fujimaki, executive managing director of Yokohama-based Sodick.
In addition, the chairman of the Association of Japan Plastics Machinery, Hozumi Yoda, said he expected more Japanese machinery investment in Southeast Asia and India.
Toshiba, for its part, plans to make 50 molding machines a month in Thailand, and sees the factory in part as a hedge against rising costs in China, said Egashira. The company's existing molding machine factory in Shanghai is also near capacity, he said.
Japanese machinery officials at the show also said the Southeast Asian investments were also a reaction against what they see as sudden policy changes on the part of the Chinese government, although they suggested rapidly rising costs were the more important consideration.
“Right now our focus is on Southeast Asia as well,” said Egashira. “From Thailand, we want to sell in India, Malaysia and Vietnam.”
The operation will begin in a rented factory but, “next year we will start construction of a new factory,” he said.
Toshiba plans to purchase as many local components as it can in Thailand, rather than just import from Japan and do final assembly there, although some components need to come from Japan, he said.
“Our target is we will purchase parts in Thailand,” Egashira said. “Some critical parts, we will import from Japan.”