Japanese suppliers in Thailand (1): new plants and R&D centers

ADVICS, Ichikoh, Sawafuji, JATCO, Shin-Kobe Electric, and Topura setting up their plants

2012/07/10

Summary

 This Report outlines the activities by Japanese suppliers in Thailand, including new plants and R&D centers for approximately one year until mid 2012.

Thailand Map The large scale flood in the autumn of 2011 had disrupted auto production in Thailand for a time, but production is recovering quickly after the flood waters retreated. It was up by 28.5% y/y to 844K units in the January-May period 2012 in Thailand. Federation of Thai Industries (FTI) forecasts an increase in auto production to 2.2 million units, up by 51% y/y through 2012, and refresh the 2010 record of 1.65 million units, according to the announcement in May 2012. Expecting to have a production volume of 2.43 million units in 2014, Thailand attempts to rank among the top ten auto production countries in the world.

 Among OEM recent activity, Suzuki and Mitsubishi built new plants in the spring of 2012, and have produced green vehicles under the Thai government's Eco-car project. Honda resumed production at the end of March after it halted operations for six months due to the flood. Toyota is building a second plant building for the Gateway plant, with plans to start operations in mid 2013. Mazda and Ford increased the production capacity of their joint venture plant. Ford built a new passenger car plant at its own cost. The plant has been running since June 2012.

 In addition to the expansion of production by OEMs, Japanese suppliers have also been active after the flood since Thailand is a key hub to export parts to neighboring countries. Many suppliers are setting up new plants and R&D centers. While the seven industrial estates located in Ayutthaya and Pathum Thani Province, north of Bangkok, were flooded, most of the suppliers planning to build their new plants in Thailand selected Chonburi and Rayong Province, east of Bangkok, for the site of their production.

 The upcoming "Japanese suppliers in Thailand (2)" will outline activities to increase production capacities and items at existing plants.


Related Reports: Japanese suppliers

ASEAN countries (Indonesia, Vietnam and Malaysia), China (North and Northeast) (Jul. 2012), India (Mar. 2012),
Mexico/Brazil (Feb. 2012)
, Europe (Dec. 2011), US (Aug. 2012)



Activities to build new plants

Advics to produce brake parts at the new plant starting in July 2013
 Advics established ADVICS Manufacturing (Thailand) in the Pinthong Industrial Estate, Chonburi Province, which was wholly owned by Advics' regional headquarters in Thailand. Advics will build its first production plant in Thailand to produce disc brake calipers starting in July 2013. The parts will be supplied to OEMs such as Toyota in Thailand as well as OEMs in Indonesia and Malaysia. The new plant will start with a monthly production capacity of 15,000 units, and increase the volume in a phased manner. Advics plans to post sales of about 9.0 billion yen in FY2016, while planning to hire about 360 employees. It will invest about 3.5 billion yen. At present, production of the brake parts for ASEAN countries is outsourced to Aisin Seiki's subsidiary in Thailand.
Ichikoh to build its first own plant to start producing lamps and mirrors in March 2013
 Ichikoh will build a new plant with a R&D center in its production subsidiary, Ichikoh Industries (Thailand). Ichikoh has a production line in the premises of its largest shareholder Valeo in Thailand. Since the business grows larger than the line capacity, Ichikoh has decided to build and relocate the production to its first own plant in the Amata City Industrial Estate, Rayong Province. It plans to produce headlamps, rear combination lamps, and mirrors starting in March 2013, and supply the products to OEMs in and outside Thailand. The new R&D center will take over part of the design function from the Japanese side. It aims for sales of 5 billion yen in 2015.
Kyowa Foundry to build a new plant to produce die-cast parts
 Kyowa Foundry and Daiki Aluminium Industry have jointly established Kyowa Casting (Thailand), in which Kyowa takes a 70% stake and Daiki a 30% stake. Kyowa Foundry is building its first overseas plant in the Eastern Seaboard Industrial Estate, Rayong Province. The new production facilities include a molding plant to develop the start-to-finish production system. It will invest about 1.0 billion yen. The plant will start producing die-cast products including clutches, cylinder heads and transmission cases in August 2012, while Kyowa Foundry is planning to supply the products to Japanese OEMs in Thailand as well as Malaysia and Indonesia. The plant will produce 600 tons per month with 60 employees. It aims to post 300 million yen of sales for its first year and 2.0 billion yen for FY2015.
Clarion to produce 2.0 million units/year of car audio systems and navigation systems
 Clarion acquired new shares of SIAM CM Electronics owned by Clarion (Malaysia), and made the SIAM as its consolidated subsidiary in April 2011, in which Clarion holds an 80% stake. The new company name is Clarion Asia (Thailand). Clarion built a new plant in Rayong Province with increased capital. The plant has produced car audio and navigation systems since April 2012. Clarion will supply the parts to Nissan, Isuzu and GM in ASEAN countries including Thailand plus India. It will move up the schedule for expanding production by one year to produce 2 million units in FY2015.
Gunma Seiko to start production of metal processed parts such as suspension in December 2012
 Gunma Seiko, a cold forging company, established Gunma Seiko Thailand in Chonburi Province. It plans to build a new plant to start production of suspension parts in December 2012 (all molds will be designed and manufactured in Japan). The plant site area is 14,000 square meters, and the floor area is 2,100 square meters. The plant will start with about 15 employees, with plans to increase the number to 40 in three years, and will supply parts to Japanese OEMs. The investment will amount to 250 million yen. It aims to post 2013 sales of 130 million yen, and 500 million yen in FY2015.
Sawafuji Electric to start joint production of commercial vehicle electric components for Hino Motors
 Sawafuji Electric jointly established Sawafuji electric (Thailand) with a local company Thai Electric Industries (TE) in Nonthaburi Province in January 2012. The venture company was capitalized at about 372 million yen. Sawafuji Electric takes a 74% and TEI a 26% stake in the venture. For Sawafuji Electric, it is the first plant in Asia. Within several years, Sawafuji plans to produce and sell commercial vehicle electric components such as starters and alternators for Hino Motors, and engine generator units for Honda.
San-En to produce forged parts related to CVT oil pumps at its own plant
 San-En built a new plant in the Amata Nakorn Industrial Estate, Chonburi Province, via its wholly owned company San-En (Thailand) capitalized at 35 million baht. The plant has been running since January 2012. San-En plans to start production with 10,000 to 20,000 units/month of forged parts related to CVT oil pumps at the start, and 70,000 to 100,000 units/month in 2015. San-En supplies the parts to Japanese OEMs in Thailand as well as other ASEAN countries. San-En does not have its own plants in Japan, and outsources production to its affiliated companies. The plant in Thailand is its first own plant for this Japanese supplier.
Jatco to produce CVTs for the first time in Thailand
 Jatco had a cornerstone ceremony at JATCO (Thailand) (the Amata Nakorn Industrial Estate, Chonburi Province), its wholly owned production subsidiary (capitalized at about 12.7 billion yen) in December 2011. Jatco will spend about 20 billion yen to build the plant to fabricate CVTs with auxiliary gearboxes for mini and small FWD vehicles starting in the middle of 2013. The initial production capacity will be 500 units/year. The plant will start with 500 employees with plans to increase the number to about 1,300 within FY 2014. Jatco will supply the parts for the Nissan March produced in Thailand, and other OEMs which are manufacturing in Thailand as well as ASEAN markets and India. This is the first time for Jatco to produce CVTs in Thailand.
Shin-Kobe Electric Machinery started shipping lead batteries in May 2012
 Shin-Kobe Electric Machinery fully funded the establishment of Hitachi Storage Battery (Thailand) in the Gateway City Industrial Estate, Chachoengsao Province, in August 2010. At the subsidiary, Shin-Kobe Electric Machinery built the lead battery production plant, and started delivery of batteries used for repair in April 2012. It invested 690 million baht. Shin Kobe Electric Machinery plans to hire 65 employees. Shin-Kobe will produce general purpose products first, and then high value added batteries for vehicles equipped with start/stop systems and regenerative braking systems. It will supply the parts to Japanese OEMs in Thailand and other ASEAN countries as well as India.
Sugimoto Metal Manufacturing starts joint production of pressed parts with a Thai home appliance manufacturer
 Sugimoto Metal Manufacturing in October 2011 established a joint venture production company SSM Automation with SNC Former, a Thai home appliance manufacturer, in Rayong Province. SNC takes a 49% stake and Sugimoto Metal a 46% stake. Sugimoto Metal built a plant in the premises owned by SNC Group, and set up ten press machines with a capacity of 300 to 800 tons. The plant has produced pressed parts with 40 employees since March 2012. Sugimoto Metal plans to start production of home appliance parts such as compressor-related parts for air conditioners, and then auto parts for Japanese OEMs. The investment will be about 200 million yen. Sugimoto aims to post sales of 600 million yen for the first fiscal year.
Tada Press to start production of underbody related parts for Press Kogyo
 Tada Press incorporated its local corporation T. P. T. in July 2011. It will spend 400 million yen to build a plant in the Amata City Industrial Estate, Rayong Province. The Japanese supplier will set up nine press machines, five welding robots and three spot welding machines in the new plant to produce underbody related parts starting in July 2012. Tada Press will supply the parts to the plant of its main customer, Press Kogyo, for the time being. Tada aims to post sales of 1.2 billion yen and turn a single-year profit in the fiscal year ending in February 2016. It attempts to increase the overseas sales ratio from zero to 40%.
Topura establishes a plant to produce fastener components starting in October 2012
 Topura established a subsidiary Topura (Thailand) capitalized at 800 million yen in the Hemaraj Eastern Seaboard Industrial Estate, Rayong Province, in May 2011. Topura plans to build a plant to start producing fastener and metal parts in October 2012. The products will be supplied to Japanese OEMs which are expanding its production in Asia, including Nissan. It aims to have sales of 1.8 billion yen in 2013.
Hiraoka Industry has a new plant for rubber molds
 Hiraoka Industry fully funded the establishment of production subsidiary Hiraoka Thailand. It started building a plant in the Suranaree Industrial Estate, Nakhon Ratchasima Province, in a North-east area of Thailand in April 2012. The construction will finish in October, while Hiraoka plans to start operations of the plant within this year. For Hiraoka, the plant is its first overseas plant. The plant will start with ten employees. The number will be increased to 30 as a plan. Hiraoka will produce rubber molds for door weather strips at the new plant. It will start with designing, modifying and servicing the molds in connection with the design change of a finished vehicle model. The Japanese supplier aims for black ink results in 2015.
Beyonz to start production of transmission parts in 2012, and suspension parts in 2014
 Beyonz established its wholly-owned production subsidiary Thai Beyonz with a capitalization of one billion yen in Rayong Province in January 2012. It will acquire an existing plant in the Eastern Seaboard Industrial Estate, and start production of 50,000 transmission parts in this October with plans to supply the parts to Japanese OEMs in ASEAN countries and North America.
 Its next plan is to build a new plant in the Amata City Industrial Estate to start production of transmission and suspension parts in May 2014. After the start of operations of the new plant, Beyonz will sell the Eastern Seaboard plant. The production capacities will be 90,000 transmission parts/month and 400,000 suspension parts/month, respectively, as of May 2014. Total investment will reach 2.3 billion yen. Beyonz aims to post sales of 2 to 3 billion yen in the fiscal year ending December 2014 in Thailand.
Honda Elesys to produce ECUs in Thailand starting in 2013
 Honda Elesys will build a plant in the Amata Nakorn Industrial Estate, Chonburi Province, with plans to produce electric control units (ECUs) starting in October 2013. Honda Elesys will produce ECUs for two-wheeler brakes first, and those for four-wheeler brakes and electric power steering in and after 2014. The production will start with several hundred thousand units per year, and will be augmented to several million units per year by FY2016. The investment will amount to about 1.3 billion yen for the first three years from FY2011 to FY2013.
 Honda Elesys positions the new Thailand plant and the existing Chinese plant as global production centers with plans to respond to globally increasing demand for ECUs by expanding the production capacities of both plants. As the entire company, Honda Elesys plans to increase the sales volume of ECU from 5.87 million units in FY2011 to 8.5 million units in FY2012, and 11.5 million units by FY2016.
Matsumoto Kosan to build a new plant to produce CVT and engine parts
 Matsumoto Kosan will establish Matsumoto Kosan (Thailand) at a capitalization of 54 million yen in Chonburi Province, and spend 300 million yen to build a new plant. This will be the company's first overseas plant. It will set up 20 cutting machines, grinding machines and measurement instruments which will work 24 hours a day. In December 2012, Matsumoto Kosan plans to start production of CVT, engine and air-conditioner parts for Japanese parts suppliers. It expects to have an annual production of 12 million units and aims to post FY2015 sales of 600 million yen in Thailand. The plant will start with 40 to 50 employees, while Matsumoto plans to increase the number of employees to 80 by 2015.
Univance to start production of transfers for Ford in September 2012
 Univance established Univance (Thailand) with a capital of about 400 million yen in Chonburi Province in February 2011 and plans to start operations in September 2012. It will start production of transfers for Ford's Thailand Plant, and then will supply the products to Japanese OEMs and suppliers. The plant will have about 100 employees. This Thailand plant is the third overseas plant for Univance following its North American and Indonesian plants. It sets a target of overseas production ratio in FY2015 at 25% (it was 5% in FY2011).
Yuhara Mfg to start production of engine pipes in May 2013
 Yuhara Mfg fully funded the establishment of Yuhara Mfg. (Thailand) in the 304 Industrial Estate, Prachinburi Province, in May 2012, with plans to start operations in May 2013. For the Japanese supplier, this will be the second overseas plant following the US. The total investment will reach 400 million yen. The subsidiary will start with export of pipe processed products for engines for GM, Ford and Chrysler in the US. In the future, Yuhara will expand the business by supplying parts to Japanese OEMs which have production in Thailand. The new company will have about 20 employees. Yuhara set its 2020 sales goal at 1 billion yen.

 

 



Activities to build new R&D centers and outsource production

Aisin to increase Design & Development engineers in Thailand
 Aisin will increase design and development engineers from the several it has now to ten personnel in AISIN Asia Pacific in Thailand, its Asia-Pacific headquarters, so that it can promote localization of designing. In 2013, Aisin will authorize the Thailand company to plan business strategies for the controlling area. Aisin plans to expand business with its main customer Toyota, as well as locally-capitalized, European, and American OEMs.
Koito Manufacturing to set up its first Southeast Asian R&D Center in Thailand
 Koito Manufacturing will build a Technology Center to design and develop products adjacent to its production company Thai Koito in Samut Prakarn Province, and began operations in April 2012. The technology center will take care of Southeast Asia including Thailand. It invested 500 million yen. The new center has a 5,000 square meter site, and the same size of building. About 30 employees are working at the new Technology Center. For Koito Manufacturing, this R&D center is the fifth following Japan, the US, China and Belgium. The Thailand Technology Center will respond to production expansion by Japanese OEMs such as Toyota, and localizing the development of strategic vehicles for emerging countries.
Shiroki to establish a new company to aid sales, purchase and techs in Asian region
 Shiroki will establish a new company Shiroki Asia to aid strengthening sales, purchase and technological functions in Bangkok City in July 2012 at the earliest. Shiroki intends to meet customer needs in a timely manner to expand sales, and improve the operation efficiencies of its business centers in Asia. Shiroki Asia is capitalized at about 25 million yen, and wholly owned by Shiroki. In FY2015, it will have about 15 employees, with the aim of sales of about 200 million yen.
Topre to outsource production of frame parts to its local affiliate company
 Topre will outsource production of frame parts to its local affiliate company via Topre (Thailand), its pressed parts and molds sales subsidiary. Topre will outsource production of pressed parts such as center and front pillars, and supply them to Nissan medium sedans. It aims to post FY2012 sales of 300 million yen, and 700 million yen in FY2013. Topre does not have a plant in Southeast Asia.

(Source: Press Releases of above companies and media reports)

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