DONGGUAN, CHINA (Nov. 20, 1:40 p.m. ET)— Japanese injection press maker Nissei Plastic Industrial Co. Ltd. plans to increase its investment in China, building a second manufacturing plant there to make larger-sized molding machines.
Nissei plans to build a 71,000-square-foot factory in Taicang, China, its second facility in that city, to expand its production range and make machines with between 220 and 460 tonnes clamping force, a company executive said in an interview at the 14th Dongguan International Plastics, Packaging and Rubber Exhibition, or DMP trade fair, held Nov. 14-17 in Dongguan.
“Of course the Chinese market is very important and the Chinese market will become larger,” said Hozumi Yoda, president of Nagano-based Nissei.
The company also used the DMP show to introduce its first injection press developed specifically for China, a version of its NEX-T series. The all-electric NEX-IIIT-EN is targeting smart phones, computers and other applications for higher-spec machines in China, Yoda said.
“Nowadays China is not a cheap production base,” Yoda said. “China now becomes the factory for the high-spec, high-tech products and faster production lines… However, negotiating about the prices here in China is very tough.”
The company said it's using the “competitively priced” Chinese-made NEX-T series as the base for new machine, and plans to just sell the machine in China, although it will sell it outside the country upon request, Yoda said.
It said the series will have a newly-developed high-speed injection unit with low-inertia servo motor that allows for an injection velocity 1.7 times faster than a standard machine, as well as an improved controller and interface software.
At the show, it demonstrated NEX-IIIT-EN machines molding LED reflectors and thin-wall smart phone casings.
China has become the world's largest producer of smart phones and tablet PCs, Nissei said.
The new Taicang investment will be operational in 2014, and is part of a major push by Nissei, one of Japan's largest press makers, to expand outside Japan.
The company in April will open a previously announced facility in Thailand, where it plans to make about 350 injection presses a year.
It makes about 700 a year now in its Taicang factory, which was its first investment outside China.
The specific size of the investment and production capacities in the new Taicang plant have not been decided, he said, but the general plan is for Taicang to make standard grade machines and Japan to make more customized and specialty equipment, like vertical and two-color presses.
Other Japanese press makers have been expanding quickly outside Japan in the last three years, like Nissei, opening factories in China and Thailand. As well, Toshiba Machine Co. Ltd. bought India's L&T Plastics Machinery Co. Ltd. in August, in a move that surprised some in the Japanese manufacturing community.
Yoda, who is also chairman of the Tokyo-based Association of Japan Plastics Machinery, said Japanese manufacturers are under cost pressures.
“We didn't expect the speed of the slowing of the Japanese economy,” he said, adding that Nissei is trying to steer “as quickly as possible” in a new direction.
Nissei will make about 2,900 molding machines this year, and plans to make between 3,000 and 3,500 a year by 2015 with the additional production, he said. Taicang could in time be an export base to Japan and other countries, Yoda said.