NAGANO, JAPAN (June 12, 9:20 a.m. ET) — Japanese injection press maker Nissei Plastic Industrial Co. Ltd. plans to build a factory in Thailand, its second outside Japan, to grow sales in Southeast and western Asia and cut its manufacturing costs.
The $8.8 million facility is expected to open in March and will produce 180 machines a year initially. The company plans to increase production to 360 presses a year there within three years, it said in a June 12 announcement.
The factory will be located in Rayon Province, in the Eastern Seaboard Industrial Estate, an area dense with investment from the global auto industry, including General Motors, Mazda and Ford, and more than 100 Japanese, European and U.S. auto parts factories, Nissei said.
“It is often called the ‘Detroit of Asia,' ” Nissei said.
The industrial estate, which is about 75 miles from Bangkok, hosts more than 230 companies, including electronics manufacturers and metal-processing firms.
The Rayon plant will make midsize, general-purpose, horizontal injection molding machines, the company said.
Nagano-based Nissei had said in late 2010 that it was looking at a factory in western Asia to handle growing demand in India, Pakistan and surrounding countries, but it said the Thai factory instead will handle that region.
It stressed that expanding sales in western Asia will still be one of the primary goals of the new facility.
It said, however, that it is setting up in Thailand because of that country's substantial market, because Thailand offered favorable tax breaks in the industrial estate and because the country has been actively working to build trade agreements with its neighbors in the Association of Southeast Asian Nations economic bloc.
The factory will have almost 55,000 square feet of manufacturing space, and sit on 4 acres of land. It will employ 50 people.
Nissei set up its first factory outside Japan in 2009, in Taicang, China, near Shanghai.
Japanese press makers have been expanding rapidly outside of their home market in recent years, looking to cut their costs in the face of strong international competition and escape their country's strong yen.
That investment initially focused on China, but is increasingly turning to other parts of Asia. Two Nissei rivals, Toshiba Machine Co. Ltd. and Sodick Plustech Co. Ltd., set up factories in Thailand last year, for example.