Japanese suppliers in ASEAN countries: Indonesia continues to expand

Activities in Vietnam, Malaysia, The Philippines, Laos, Cambodia and Myanmar also discussed

2013/11/27

Summary

 The following report is an update of activities of the Japanese suppliers in ASEAN countries, covering the ten-month period up to the end of October 2013. (Activities of Japanese suppliers in Thailand will be provided in a different report.)

 The automobile sales volume (new vehicle registrations) in Indonesia continued to expand with 1.08 million units for 2012, an increase of 24.3% year-over-year (y/y), and 989,000 units during the January to October 2013 period (10.8% y/y increase). Japanese automakers such as Toyota, Nissan, Honda, and Daihatsu are increasing their production capabilities in Indonesia. Japanese suppliers have followed the OEMs and have been expanding their production capacities. Other activities include the conversion of joint ventures (JVs) into wholly-owned subsidiaries, the increase of investment and production items, the introduction of integrated production system to meet customer needs more flexibly, and the positioning of Indonesia as an export hub.

Activities of Japanese suppliers in Indonesia

New entries * Supply to automakers: Aichi Machine (MTs), NHK Spring (seats) for Nissan and Datsun, Asahi Forge (final gears for Honda; also exporting), Metalart (engine components for Daihatsu), F-Tech (suspension components), Kodama Chemical (interior/exterior parts), Yamashita Rubber (vibration insulating rubber), TDF (front axles for trucks)
* Supply to Tier 1 suppliers: Asahi Kasei Chemicals (resin compounds; converted export from Thailand to local production under contract), Sunrise Industry (hose mouth rings for car A/Cs; converted export from Malaysia to local production), Nagoya Precision Mold (resin molds for lamps; converted export from Vietnam to local production)
* Positioning of Indonesia as export hubs: H-One (dies for frame components), Nishikawa Rubber (automobile rubber and plastic products), Tatsumi (electric and brake components)
Enhancement of production capacities * Construction of second plants: Akashi Kikai (MTs), Toyota Industries (compressors for A/Cs; also exporting to India and Brazil), Kasai Kogyo (door trims), JFE Shoji (steel material processing)
* New/additional line and plant expansion: Aisan Industry (throttle bodies; also exporting to neighboring countries), Denso (spark plugs), Toyoda Gosei (airbags), Yutaka Giken (exhaust parts)
* Addition of new items: JFE Steel (established a new company for producing hot-dip galvanized steel sheets), Nissin Kogyo (brakes for automobiles), Press Kogyo (frames for medium- and heavy-duty trucks; also exporting to Southeast Asian countries)
* Establishment of integrated production system: TS-Tech (established a new seat assembly plant), Toyota Auto Body (started in-house production of large plastic parts), Univance (gears; established a forging plant and a new building for transfer cases; also exporting to China)
Conversion into subsidiaries/additional investments/acquisitions * G-Tekt (converted a joint venture into a wholly-owned subsidiary), Nippon Piston Ring and TPR (dissolved their joint venture into separate businesses), Tachi-S (established a seat assembly plant through additional investment), Toyoda Gosei (increased its investment ratio for a sealing production joint venture), Toyota Tsusho (invested on a local leading supplier), Kuroda Electric (acquired a local automotive supplier)

Sources:Press releases by each company

Related Reports:
* Russia and Eastern Europe (Oct. 2013)
* India (Sep. 2013)
* Northern/Northeastern/Southwestern China (Aug. 2013)
* Southern and Central China (Aug. 2013)
* Eastern China (Jul. 2013)
* the US (Jul. 2013)
* Mexico and Brazil (Jun. 2013)
* Thailand (Apr. 2013)
* South East Asia (Mar. 2013)



Indonesia: establishment of new production bases

Aiei Sangyo establishes joint venture for stamping parts production

 In October 2013, Aiei Sangyo (reportedly) established a joint venture for stamping parts to the south of Jakarta with a local supplier, PT. Guna Senaputra Sejahtera in Bogor prefecture, West Java. Aiei Sangyo will own 51% share of the JV. The company is expected to make an investment of JPY 400 million and introduce a transfer press machine. The JV will start operations in August 2014 and supply stamping parts to Japanese suppliers. Since orders in Japan are on the decline, Aiei Sangyo aims to win orders in Indonesia and post revenue of JPY 700 million in 2017. (Source: report released in April 2013)

Aichi Machine to start knockdown production of manual transmissions

 Aichi Machine received orders for manual transmissions for the new Datsun to be launched by Nissan in 2014. It will produce and machine major parts in its Japanese plant and produce knockdown kits at its plant near Nissan's Indonesian vehicle plant. (Source: report released in March 2013)

Asahi Kasei Chemicals consigns production of polyamide 66 resin compounds

 In August 2013, Asahi Kasei Chemicals started consigned production of polyamide 66 resin compounds for automobiles at its joint venture with Nippon Pigment, P.T. NIPPISUN INDONESIA in Bekasi regency, West Java. The supplier had previously exported the compounds from Asahi Kasei Plastics in Thailand, but shifted the supply source to Indonesia. This is to promptly satisfy growing demand from its customers, mainly Japanese suppliers. The annual production will be 40 million tons.

Asahi Forge establishes final gear plant; to begin mass production in December 2013

 In April 2013, Asahi Forge completed the construction of a new plant of its fully-owned subsidiary, PT. ASAHI FORGE INDONESIA in Karawang, West Java. Mass production of final gears is expected to start in December 2013. JPY 2 billion will be spent on this project. The annual production target is 1 million units. Previously, the gears were exported from Japan via Honda, its major customer. However, Honda started operations at a new plant in Indonesia. Following Honda, Asahi Forge constructed its first plant in Southeast Asia. In the future, the company aims to win orders from OEMs other than Honda and set the plant as its export hub to Asian countries.

Usui Kokusai Sangyo to build piping parts plant; to start operations in March 2014

 Usui Kokusai Sangyo will spend JPY 10 billion in total between the fiscal year ending March 2014 (FY 2013) and FY 2014 to increase its piping parts production capacity in Asia and North America. In Indonesia, a new plant of PT. USUI INTERNATIONAL INDONESIA in Tangerang city, Banten is planned to start operations in March 2014. The company will invest several billions of Japanese yen in this project to develop its production network which is capable of quickly satisfying the needs from its customer OEMs.

H-One to establish new die plant for frame components

 In September 2013, H-One announced its plan to establish a joint venture, PT. H-ONE KPGI PRIMA AUTO TECHNOLOGIES INDONESIA, in Karawang city, West Java, in November 2013. It will be capitalized at about JPY 1.5 billion. H-One will own 50% of shareholding, Kogi 25%, and PT. RODA PRIMA LANCAR (RPL) 25%. By combining expertise of the three companies and handling right from materials, it aims to produce and sell competitive automobile die castings and stamping dies. Regarding the plant, RPL's existing building will be used and production facilities for castings and dies will be introduced with an investment of JPY 2 billion. 150 dies will be annually produced and the plant is scheduled to start operations in January 2014. In addition to its production bases in Japan, North America, China, India, and Thailand, dies will also be supplied to RPL and other automotive parts suppliers in Indonesia.

F-Tech to start production of suspension components at its new company from autumn 2013

 In January 2013, F-Tech established a production subsidiary, PT. F.TECH INDONESIA at Karawang industrial park in Karawang, a suburb of Jakarta. It was capitalized at about JPY 500 million. Production of suspension components will start from Autumn 2013 initially at a rented plant. To utilize its existing facilities in Asia, components will be stamped at its Thai plant, and welded and painted in Indonesia. F-Tech is considering constructing its own plant in view of production trends.

Kodama Chemical Industry starts production of plastic parts in March 2013

 In March 2013, Kodama Chemical Industry started full production at PT. Echo Advanced Technology Indonesia's plant in Karawang city, West Java. It produces interior/exterior parts such as instrument panels made of polypropylene and acrylonitrile-butadiene-styrene (ABS) plastic and sells them to Japanese automakers.

Sunrise Industry starts operation of hose mouth ring production plant in February 2013

 Sunrise Industry's Malaysian subsidiary, Sunchirin Industries (Malaysia) Berhad in Shah Alam city, Selangor, completed the construction of its new Indonesian plant in Karawang city, West Java. Production of hose mouth rings for car air conditioners (A/Cs) began in February 2013, and products have been supplied to customers such as Denso Indonesia. The rings were previously supplied from Malaysia, but the supplier changed the source to cope with increasing demand in Indonesia. The plant will produce rings for 50,000 vehicles per month and full-scale production is scheduled within FY 2013.

JSR establishes joint venture for carbon compounded rubber production

 In June 2013, JSR's group company, Elastomix, established a joint venture, PT. ELASTOMIX INDONESIA in Karawang, West Java, with Indonesian PT. Prospect Motor in Bekasi regency, West Java. It was capitalized at about JPY 810 million. Elastomix will own 75% of shares and PT. Prospect Motor 25%. This is JSR's second hub in the ASEAN region, after Thailand. The JV will produce carbon master batches for tires and automobile windowsills. One Banbury (mixer) with an annual production capacity of 9,000 tons will be introduced and operations are set to start in April 2014. In addition to Japanese automakers, the supplier aims to explore local customers and enhance its production capacity gradually in accordance with an increase in demand.

Dynic to establish non-woven material production subsidiary

 In August 2013, Dynic announced that it will establish a subsidiary to produce non-woven materials for automobiles, PT. DYNIC TPC. The subsidiary is set up jointly with a Thai textile manufacturer, TEXTILE PRESTIGE PUBLIC Co., Ltd. It will be capitalized at USD 5 million. Dynic will own 51% of shareholding and aims to increase cost competitiveness through local production. Indonesia is the third country that the supplier has established its hubs in Southeast Asia, following Singapore and Thailand.

Diamond Electric establishes local ignition coil production subsidiary

 In July 2013, Diamond Electric established its wholly-owned local subsidiary, PT. Diamond Electric Indonesia in Jakarta. It plans to build a new plant in Bekasi regency, West Java and complete its construction in June 2014. The company will invest JPY 500 million on this project. Ignition coils for engines will be manufactured and supplied mainly to Japanese automakers. Production will start initially with an annual volume of 2 million units and increase gradually according to demand. The supplier also aims to manufacture auto electronics-related products in the future.

Tatsumi establishes electric and brake component subsidiary

 In October 2013, Tatsumi established a joint venture, PT. TATSUMI INDONESIA in Banten state, with its parent company, Mitsuba. It was capitalized at USD 5 million with Mitsuba owning 60% of shareholding and Tatsumi 40%. In April 2013, Mitsuba started production of electric and brake components for automobiles and motorcycles at its local subsidiary's third plant. Tatsumi plans to place this JV, its first overseas subsidiary, as its export hub for existing and new customers in South East Asia. It aims to achieve revenue of JPY 200 million for the first year and JPY 1 billion in five years.

Tsuda Industries and Mannoh Industrial start shift lever production

 In July 2012, Tsuda Industries and Mannoh Industrial established a joint venture, PT. MTAT-INDONESIA in Bekasi regency, West Java, and its new plant started operations in July 2013. Initially, its main operations will be an assembly of transmission shift levers, with components shipped from its Thai plant and also procured locally. Mannoh Industrial and Tsuda Industries will produce parts for MTs and ATs, respectively, on separate lines.

TDF accepted new member, Marubeni-Itochu Steel, to its three-company joint venture with Jidosha Buhin Kogyo and a local subsidiary

 TDF established a joint venture, PT. TJForge Indonesia in Karawang city, West Java, in March 2013 and accepted Marubeni-Itochu Steel, as a fourth joint member, to this JV in June 2013. It was capitalized at about JPY 2.4 billion with TDF owning 40.0% of shares, Jidosha Buhin Kogyo 25.2%, a local subsidiary 24.8%, and Marubeni-Itochu Steel 10.0%. A plant is under construction within the premises of I Metal Technology's casting plant and scheduled to start operations in May 2014. At this plant, integrated production system will be established to assemble and sell automobile parts such as front axles for trucks. I Metal Technology and TDF will cast parts, and Jidosha Buhin Kogyo will machine and assemble them. In procurement of steel, trading company's expertise will be utilized to expand business. The production capacity on a forged product volume basis will be 10,000 tons per year.

Nagoya Precision Mold begins operations of resin mold production plant in March 2013

 In March 2013, Nagoya Precision Mold began operations of a new plant of PT. MSMOLD INDONESIA in Bekasi regency, West Java to supply resin molds for automobile and motorcycle lamps. These molds had been previously exported from its Vietnamese subsidiary. By shortening the delivery time and enhancing its maintenance infrastructure, the supplier aims to cope with increased production at Japanese suppliers and win more orders. It will invest JPY 300 million on this project and aims to attain sales of JPY 200 million in 2016.

Nishikawa Rubber to start production of rubber and plastic products from end of 2013

 In December 2012, Nishikawa Rubber established PT. NISHIKAWA KARYA INDONESIA in Sumedang, West Java, jointly with a local company, PT. KARYA PUTRA SANGKURIANG. It was capitalized at USD 16 million with Nishikawa Rubber owning 80% of shares. A plant is currently under construction with the goal of beginning production of automobile rubber and plastic products starting by the end of 2013. The supplier aims to enhance support for ASEAN countries and expand product sales to stabilize its business. It plans to achieve sales of JPY 1 billion in the fiscal year ending in December 2018.

NHK Spring jointly establishes seat manufacturer with French company, Faurecia

 In August 2013, NHK Spring announced that it completed the procedure to establish a seat manufacturer, PT. NHK F. KBU INDONESIA AUTOMOTIVE SEATING in Purwakarta, West Java. The subsidiary was set up jointly with Faurecia and a local supplier, PT. KARUYA BAHANA UNIGAM (KBU). It was capitalized at USD 12 million with NHK Spring owning 51% of the share, KBU 30%, and Faurecia 19%. This is NHK Spring's first production base in Indonesia. It plans to start production in March 2014 to supply seats for Nissan's new models and aims for revenue of JPY 3.56 billion in FY 2015.

Hashimoto Engineering starts operations at instrument panel frame plant in September 2013

 In September 2013, Hashimoto Engineering began operations of a plant at its first overseas site in Karawang city, West Java. Iron frames which are used inside instrument panels are produced and shipped to major Japanese suppliers. To reduce the initial investment, the supplier rents a mold plant from a Japanese company. It invested JPY 50 million in this project and plans to increase production capacity gradually, from the initial monthly capacity equivalent to 10,000 vehicles. After production and machining of parts become stable, the company plans to start production of molds and jigs.

Hikari Seiko considers starting production in Indonesia

 Hikari Seiko is a manufacturer of bearings as well as drive and engine parts such as universal joints. It plans to invest JPY 1 billion in its overseas plants in three years up to 2015 to increase its production capacities in the U.S., China, and the Philippines. It is also considering starting production in Indonesia. (Source: report released in July 2013)

Fuji Oozx establishes joint venture for engine valve production

 In August 2013, Fuji Oozx established a joint venture, PT. FUJI OOZX INDONESIA in Karawang, West Java, with a local supplier, PT. Prospect Motor. It was capitalized at USD 20 million, with Fuji Oozx owning 75% of the share. In October 2014, the JV will start production of engine valves, which will be supplied to Japanese automakers. The supplier plans an initial production volume of 1.4 million units per month, gradually increasing it to 2.2 million units in 2020. This is to cope with increasing local procurement requests from Japanese automakers.

Heian Manufacturing allies with local supplier; to grant drive system component technology

 In September 2013, Heian Manufacturing formed a business alliance with a local supplier, PT. Pamindo in Jakarta, mainly for technology transfer. It will first license its technology to manufacture drive plates (drive system components). Products will be supplied to two Japanese automakers. Upon judging that its own investment would carry a significant risk, the company selected a partnership with Pamindo, but is also considering making an investment within two years. It plans to double the annual production volume of this product from the current volume to 1 million units in two years.

Metalart establishes forged parts production subsidiary in May 2013; converts it to joint venture in September 2013

 In May 2013, Metalart established PT METALART INDONESIA in Karawang, West Java, to manufacture and supply engine components such as crankshafts and con rods to Daihatsu's local plant. It plans to construct a new plant and start its operation in September 2014. In September 2013, the supplier also made an additional investment increase to its subsidiary's capital from USD 5.9 million to USD 14.8 million strengthening its financial base, ensuring a smooth business startup, and expanding the business. Meanwhile, Metalart transferred about 30% of its stocks to a leading Indonesian auto parts manufacturer, PT ASTRA OTOPARTS Tbk, to leverage their business experience and support for business expansion. The subsidiary's name was also changed to PT METALART ASTRA INDONESIA.

Yamashita Rubber to start operations of new vibration insulating rubber manufacturing plant in April 2014

 Yamashita Rubber is constructing a new vibration insulating rubber plant in Jakarta and plans to start its operations in April 2014. It will invest JPY 2.5 billion on this project and this plant will be its first production base in Indonesia. Main products at this plant will be vibration insulating rubber such as engine mounts and these products will be supplied to Honda and Suzuki. The supplier aims for revenue of more than JPY 3 billion in FY 2018.

 

 



Indonesia: strengthening business and introduction of new products

Aisan Industry adds throttle body production line

 In FY 2013, Aisan Industry is investing JPY 1 billion to add a production line to a plant of P.T. AISAN NASMOCO INDUSTRI in Bekasi regency, West Java. This is to increase the production capacity of parts such as throttle bodies, its major products, and fuel pumps by about 10%. In addition to customers within Indonesia, throttle bodies will also be supplied to Thailand and other neighboring countries, and fuel pumps to Japanese motorcycle OEMs. The company also plans to study the feasibility of establishing a new plant within Indonesia or in another country such as Thailand and Vietnam to decentralize its production.

Akashi Kikai constructs second MT production plant

 Akashi Kikai Industry is constructing PT. AKASHI WAHANA INDONESIA (Jak-Ut)'s second plant in Karawang, West Java, near Daihatsu's new plant. The production of MTs will start as early as the beginning of 2014. Because the existing plant has almost run out of expansion space, the company will increase the MT production capacity by 30% through an investment of JPY 1 billion. Major components such as gears will be shipped from Japan and final assembly will be done at this second plant. The supplier's MT production capacity in Indonesia will reach 45,000 units per month.

Kasai Kogyo to construct second interior parts plant

 In August 2013, Kasai Kogyo announced that it will construct a second plant near the P.T. Kasai Teck See Indonesia's existing plant in Karawang, West Java. From April 2014, the plant will produce door trims, mainly for Nissan's small cars and sports utility vehicles (SUVs). Through this plant expansion with an investment of JPY 1.2 billion, the company aims to increase its annual sales in Indonesia from JPY 1.2 billion in 2012 to JPY 3 billion in 2014.

Kuroda Electric acquires Indonesian metal stamped and resin molded parts manufacturer

 In March 2013, Kuroda Electric announced that it has acquired 51% of the outstanding shares of Indonesian PT. TRIMITRA CHITRAHASTA in Bekasi regency, West Java. TRIMITRA is a Tier 1 supplier that manufactures, welds, and machines metal stamped parts such as wheels and pedals. It also produces resin molded parts including door mirrors for automobiles and motorcycles. The company also manufactures molds and 90% of its sales come from Japanese OEMs. Kuroda Electric mainly deals with flat panel displays and electronic components in the information and communication fields, but aims to enter into the Indonesian automobile industry through this acquisition. The company also plans to strengthen its operations in the auto parts field by collaborating with its auto-related subsidiaries in countries such as China, Thailand, and Vietnam.

JFE Steel to build new line to produce hot-dip galvanized steel sheets for automobiles

 In May 2013, JFE Steel established PT. JFE STEEL GALVANIZING INDONESIA in Bekasi regency, West Java. This is to cope with growing demand for high-end automotive steel sheets in Indonesia. This will be its third hot-dip galvanizing line for automobiles in Asia after China and Thailand. The line is scheduled to go into production in March 2016, with an annual production capacity of 400,000 tons and total investment of USD 300 million.

JFE Shoji to construct second plant at steel material processing center

 In June 2013, JFE Shoji decided to construct a second plant at its steel material processing center, PT. JFE SHOJI STEEL INDONESIA (JSSI) in Bekasi regency, West Java, and newly introduce one large leveler. This is to attract expected increasing demand for automotive steel materials to expand operations. JSSI's new plant is set to start production around April 2014. After the second plant begins its operations, JSSI's annual machining capacity will increase from 97,000 tons to 158,000 tons.

G-Tekt to turn joint venture for body parts weld assembly into wholly owned subsidiary

 In April 2013, G-Tekt announced its plan to convert its joint venture, PT. Auto-Body Manufacturing Indonesia (AMI) in Karawang, West Java, into a wholly-owned subsidiary. The 50-50 joint venture was established in February 2013 with H-One. G-Tekt will acquire all shares owned by H-One to expand business, aiming at integration of AMI and its existing Indonesian subsidiary, PT. G-TEKT Indonesia Manufacturing (body stamping parts plant) in Karawang city, West Java.

Somic Ishikawa to enhance production capacity of ball joint parts

 Somic Ishikawa will enhance the annual production capacity of its subsidiary, PT. SOMIC INDONESIA in Bekasi regency, West Java, from 250,000 on a vehicle volume basis in 2013 to 750,000 in 2015. This is in response to increased demand for ball joint parts to be used on new small cars targeted for middle-class customers by Japanese OEMs inluding Toyota, Daihatsu and Suzuki. JPY 400 million will be invested on this project. The supplier is also considering constructing a new building if additional production increase is required in the future.

Taiho Kogyo plans to add highly efficient engine bearing line in FY 2015 or later

 In August 2013, Taiho Kogyo added the second "RR line", a small-scale, highly efficient engine bearing machining line, to its Hosoya plant in Toyota City. The plant produces bearings for Toyota's small engines with the two lines. It plans to introduce a third line of this kind in FY 2015 or later, at its Indonesian or Chinese plant. This is to utilize cost competitive lines to win more orders, in response to growing demand for small, low-cost models.

Tachi-S to construct seat plant

 In May 2013, Tachi-S announced its additional investment of USD 8.5 million in a new seat production plant at TACHI-S INDONESIA in Karawang, West Java. The supplier currently contracts out seat assembly to local companies, but decided to construct its own plant because Honda, its major customer, plans to start operations of a new plant within 2014. Other Japanese OEMs are also increasing their production. The plant will go into production in November 2014. Only final assembly will be operated at this new plant and major components such as frames will be shipped from its Thai base to save the amount of investment. An annual production volume of 70,000 units is expected in FY 2016, but the supplier plans to increase it later.

TS-Tech to construct new seat assembly plant

 TS-Tech's subsidiary, PT. TS TECH INDONESIA in Bekasi regency, West Java, owns a dedicated plant for sewing automobile seat trim covers. In March 2013, TS-Tech announced its plan to construct an assembly plant for these seats within the same premises of the sewing plant. It aims to improve production efficiency through integrated production covering from sewing to assembly. The company will invest JPY 1 billion on this project and the new plant is scheduled to start production in January 2014.

TPR to dissolve local joint venture with Nippon Piston Ring; to start mass production at wholly-owned local subsidiary within FY 2013

 In July 2013, TPR announced that it has reached an official agreement with Nippon Piston Ring on dissolution of its joint venture, NT PISTONRING INDONESIA. With this dissolution, TPR will start full-scale production at its wholly-owned subsidiary, PT. TPR INDONESIA in Bekasi regency, West Java (established in 2011), within FY 2013. This shift to independent operation will allow the company to meet diversifying customer needs promptly. This subsidiary's annual production capacity is set at 24 million units in 2014, combining production of piston rings for both automobiles and motorcycles. TPR aims to expand its business further by responding to increasing local engine production at Japanese OEMs in Indonesia.

Denso to introduce new line to increase spark plug production capacity

 Denso plans to increase its global spark plug sales by 17% from FY 2012 level to 290 million units by FY 2015. As the increase in demand is expected for low-cost nickel plugs in Asia, it will introduce a new nickel plug line to PT. DENSO INDONESIA Fajar's plant in Bekasi regency, West Java. The plant will start operations in February 2014. Ceramic parts will be produced intensively at its Daian plant in Japan.

Toyoda Gosei to increase airbag production capacity; to convert joint venture for sealing parts sales and technology into subsidiary

 By 2016, Toyoda Gosei will invest JPY 800 million in P.T. Toyoda Gosei Safety Systems Indonesia in Bogor prefecture, West Java to expand its plant and introduce new production facilities. With this expansion, the annual airbag production capacity will increase by five times from 2013 level to 1.5 million units and that of steering wheels by 1.5 times to 800,000 units. The company is enhancing its supply capacity since demand for airbags is expected to increase following the introduction of the ASEAN NCAP (New Car Assessment Program), an automobile safety rating program, in January 2013 in Indonesia.
 At the end of October 2013, Toyoda Gosei also plans to increase its investment ratio in P.T. INOAC TG Indonesia in Jakarta, a joint sales and technical support venture to 51%, and converts it into a subsidiary. The JV produces automotive sealing products such as door weather stripping. The company name will also be changed to P.T. TG INOAC Indonesia. As the management reshuffling took place, the supplier aims to strengthen customer support and acquire more orders, targeting sales of JPY 3 billion in 2016, an increase of 50% from 2012 level.

Toyota Industries to construct second car A/C compressor plant

 In April 2013, Toyota Industries announced its plan to construct a second plant at P.T. TD Automotive Compressor Indonesia in Bekasi regency, West Java after acquiring a site within the same industrial park. It plans to start production of car A/C compressors in May 2014, with an annual production capacity of 800,000 units. The company will also enhance the production capacity of the first plant (1.6 million units in 2012), to ensure a combined annual production capacity of 3 million units by FY 2016 at the two plants. JPY 6.3 billion will be invested in the second plant. Currently, Japanese OEMs are its main customers in Indonesia, but it will also start supplying to American OEMs within FY 2013. Regarding exports, it will start exporting to Brazil in FY 2013, in addition to South East Asian countries and India.

Toyota Auto Body to start production of large plastic parts from November 2013

 In September 2013, Toyota Auto Body announced its plan to introduce a large mold machine to PT. Sugity Creatives at MM2100 industrial park in Bekasi regency, West Java. The company also will start in-house production of large plastic parts including bumpers using the molds produced at the plant from November 2013. This is to establish an integrated production system from mold manufacturing to parts production, leading to the company's higher cost competitiveness.

Toyota Tsusho to invest in largest Indonesian auto parts supplier

 In May 2013, Toyota Tsusho announced that it has agreed to an acquisition of 4.9% of the outstanding shares of PT Astra Otoparts Tbk in Jakarta, the largest Indonesian automobile parts supplier. JPY 9.3 billion will be invested in this acquisition. Astra Otoparts deals with a wide range of businesses from auto parts forging, casting, plastic molding, tire production, to after-sales services. Astra supplies its products to Japanese OEMs and suppliers. Through this stock acquisition, Toyota Tsusho aims to expand its automobile-related business in the growing market in Indonesia.

Nissin Kogyo to start production of automobile brake components at existing plant

 Nissin Kogyo acquired a plant site next to the Karawang plant (producing motorcycle parts) of its local joint venture, P.T. Chemco Harapan Nusantara in Bekasi regency, West Java. It plans to construct a new plant to begin producing automobile brake products within FY 2013. In Indonesia, the company currently produces motorcycle brake products, but aims to expand business for automobiles due to expected growth in this field. The production volume is yet to be released. (Source: Press release in March 2013)

Nippon Piston Ring dissolves joint venture with TPR; turns it into wholly owned subsidiary

 In July 2013, Nippon Piston Ring dissolved its joint venture with TPR, PT. NT PISTONRING INDONESIA in Karawang, West Java, and acquired 100% of the share to make it its wholly-owned subsidiary. The company will produce and sell piston rings based on its own decision regarding customer support and growth strategies.

Piolax to invest additional JPY 800 million in new plant scheduled to start operation in August 2013

 In its mid-term management plan up to FY 2015, Piolax aims to increase its overseas sales ratio from 38% in FY 2012 to 58%. Under its policy to expand production in North America, South East Asia, South Korea, and China, it will also enhance its production capacity in Indonesia further. In June 2012, the company established a plant of PT. PIOLAX INDONESIA in Karawang, West Java. The plant already began operations in August 2013 and produces automobile and motorcycle parts.Piolax plans to make additional investment of JPY 800 million in its facilities.

Press Kogyo to start frame parts business for medium- and heavy-duty trucks

 Press Kogyo will invest JPY 2 billion on a plant of PT. P K Manufacturing Indonesia in Karawang, West Java. The company will introduce press, drilling, laser beam, and painting facilities to establish a production system for side member assemblies (truck frame components). The plant will start production for Isuzu trucks from 2014 and produce components for 17,000 vehicles per year. It will produce all medium- and heavy-duty truck frame components for Southeast Asia.

Yutaka Giken to increase annual exhaust parts production volume to 500,000 vehicle equivalent

 Yutaka Giken will increase its exhaust parts production capacity in South East Asia by 60% to 500,000 vehicle equivalent per year within FY 2013. In Indonesia, it will establish a new building for automobile exhaust parts at P.T. YUTAKA MANUFACTURING INDONESIA in Bekasi regency, West Java. The annual production capacity will increase from the current 14,000 vehicle equivalent to 130,000 at the beginning of 2014. Yutaka Giken has received new orders from Honda for the Brio targeting emerging countries. The supplier will manufacture silencers/mufflers and catalytic converters for the model at the plant. In 2016, it plans to produce mufflers for 235,000 vehicles and catalytic converters for 263,000 vehicles.

Univance constructs forging plant for integrated production of transfer case production

 Univance is constructing a new forging plant at PT. UNIVANCE INDONESIA in Purwakarta regency, West Java to start integrated production of transmission and transfer case gears from the beginning of 2014. With an investment of JPY 660 million, the company aims to reduce the total cost by more than 10%, including the transport cost cut for forged parts imported from Japan. The production capacity is expected at 150,000 units per month, equivalent to 25% of the company's total production. It positions this Indonesian plant as a global gear supply hub on par with that in Japan.
 The company is also constructing a new building for front-wheel drive (FWD) transfer cases and plans to start operations from the end of 2013. Univance will supply the products to Nissan's Indonesian plant, and will also export them to China. It plans to produce several hundred thousand units per year. This is its second overseas hub for FWD transfer case production, after the U.S.

 

 



Vietnam: establishment of new hubs and expansion of existing plants

Sahara Industry to construct own plant to produce resin molded parts

 Sahara Industry currently produces its components at a rented plant in its subsidiary, SAHARA INDUSTRY VIETNAM CO., LTD. in Bac Ninh province. The company plans to construct its own plant with an investment of JPY 100 million due to an expected increase in orders to be received. The plant is scheduled to start operations in June 2014. Products produced at this plant, including door locks, horns, and engine-related resin molded parts such as water temperature sensors, will mainly be supplied to Hamanakodenso's plant in Vietnam. The company is also considering construction of a second plant in the future.

Sumitomo Wiring Systems to expand automotive wire and connector component plant

 Sumitomo Wiring Systems will expand an automotive wire plant of SEWS-COMPONENTS VIETNAM CO., LTD. in Hung Yen province with an investment of JPY 1.4 billion to increase production by 20% from the current volume to 1,600 tons per month. It will also build a new two-story building at its connector component plant in the same industrial park. JPY 1.4 billion will be invested in this construction to increase the monthly production volume from 24 million units to 34 million. The operations are scheduled to start in November 2013. In July 2013, its automotive cable components plant, established with an investment of JPY 800 million, started operations in Nam Dinh province. These wires and cable components will be exported and supplied to automakers' assembly plants in Japan and North America.

Toyoda Giken to start in-house production of dies at lighting component production plant

 Toyoda Giken will introduce new machineries at Toyoda Giken Vietnam Co., Ltd. in Hanoi, to start in-house production of dies for a lamp part by March 2014. The company will invest JPY 10 million with this introduction. This is in response to expected demand for a wider variety of products from leading automobile lighting manufacturers, its major customers. Currently, the company owns lines for pressing, welding, grinding, and plating processes. Toyoda Giken aims to decrease cost for shipping dies from Japan by starting in-house local production and increase its competitiveness. Products will be exported to Japan, the U.S., and Asian countries.

Nippon Seiki opens software design and development center

 In October 2013, Nippon Seiki opened an on-board instrument software design and development center, DANANG NIPPON SEIKI COMPANY LIMITED, in Da Nang city. It was capitalized at USD 1 million. It will mainly employ local designers and aims to enhance cost competitiveness and development. Initially, this center will be in charge of design and development of lower processes, based on upper processes designed in Japan.

Nidec Tosok to produce electric fuel pumps and control valves at new company

 In April 2012, Nidec Tosok established its second hub, NIDEC TOSOK PRECISION VIETNAM CO., LTD, in Ben Tre province. The mass production at this plant will start by summer 2013 to produce electric fuel pumps for hybrid vehicles (HVs) and vehicles with a start/ stop system. All products will be exported to other countries. It will also start mass production of AT and CVT (continuously variable transmission) control valves for new Japanese customers from the second half of FY 2013. (Source: Press release in May 2013)

Fujikura Rubber to construct second plant within premises of automobile rubber component plant

 Fujikura Rubber will construct a second plant within the premises of FUJIKURA COMPOSITES HAIPHONG, Inc. in Hai Phong city and introduce molding, vulcanizing, and other necessary facilities. It will establish an integrated system for producing industrial rubber components for engine-related parts. The total investment is estimated at USD 9.6 million. This is a part of its network establishment to cope with automobile and motorcycle production increase in South East Asia. The construction of the plant is scheduled to be complete in mid-April 2014.

Bridgestone decides to enhance production capacity of new passenger car radial tire plant

 In October 2013, Bridgestone announced that it will enhance the production capacity of a new passenger car radial tire (PSR) plant, currently under construction at Bridgestone Tire Manufacturing Vietnam Limited Liability Company in Hai Phong city. The plant will go into production as initially planned in March 2014, with a production capacity of 25,000 tires a day (planned for the first half of 2016). To cope with a demand increase in the global market including the U.S., the company plans to enhance the daily capacity further by 24,000 tires to 49,000 tires by the second half of 2017. JPY 41.6 billion will be invested for this capacity increase. This plant will be placed as its PSR export base, and supply general-purpose tires to Europe, the U.S., and Japan.

Mitani Sangyo to enhance production capacity of wire harness plastic parts

 Mitani Sangyo will add facilities for producing wire harness plastic parts to the two plants of Aureole Business Components & Devices Inc. in Dong Nai province. These plants are located in the south and north of Vietnam, respectively. The company will increase the production volume from 5.5 million units per month to 7 million units by autumn 2013. JPY 200 million will be invested in this project. This is in response to growing demand for parts, due to an increase in automobile production in Southeast Asian countries and North America.

Yazaki Corporation to start construction of wire harness branch plant as early as December 2013

 Yazaki Corporation will construct a second branch plant in the industrial zone in Quang Ninhh province. The company has the main plant of Yazaki Haiphong Vietnam., Ltd. in Hai Phong city and its branch plant in Thai Binh province, northern Vietnam. It plans to start construction by December 2013 with an investment of USD 35 million. It decided to construct a new plant to increase its global production capacity for wire harnesses.

Yamashita Rubber to transfer R&D, production technology, and headquarters function to Vietnam

 Yamashita Rubber will transfer its headquarters and R&D functions to Vietnam. First, it established Y-TEC VIETNAM Ltd. in Hai Phong city, jointly with a local company, Technofront, in May 2013. It was capitalized at USD 84 million. Yamashita Rubber will complete a building in April 2014 and full operations will begin with R&D. JPY 4 billion will be invested in three years to gradually establish the necessary functions, including the global mother plant, mass production plant, global human resource development functions, a shift to in-house production (dies/fittings/facilities) and reduction of fixed cost. The current headquarters are in Saitama prefecture, Japan and it will be maintained for the time being to continue customer support, conduct development for Japanese OEMs, and manage plants in Japan.

Yokowo to complete second phase of new plant construction in March 2014; to produce products also for ASEAN markets

 Yokowo completed the first phase of plant construction at its new hub, Yokowo Vietnam Co., Ltd. in Ha Nam province in a suburb of Hanoi, and full production began in September 2012. The plant produces wireless harnesses for on-board communication units and AM/FM micro antennas for the Japanese market. Yokowo will complete the second phase of construction of this plant, which is currently under way, by the end of March 2014. The company aims for a monthly production of 1 million units in autumn 2014. Yokowo will establish a production system that can also cope with product models for ASEAN countries and the American and European markets.

 

 



Malaysia/Singapore/The Phillippines/Laos/Cambodia/Myanmar

Malaysia

Akashi Kikai to start operations of new electronically-controlled AT plant

 In February 2012, Akashi Kikai Industry established a joint venture, AKASHI KIKAI INDUSTRY (M) SDN.BHD. in Negeri Sembilan state and its new plant is scheduled to start operations at the beginning of 2014. The plant will have an annual production capacity of 150,000 electronically-controlled ATs. The company aims to establish technology for producing drivetrain units and to manufacture ATs that achieve both high quality and low cost. It also aims to increase local procurement ratio further and enhance cost competitiveness.

Ube Industries establishes joint venture for tire synthetic rubber production and sales with Lotte Chemical Group

 In March 2013, Ube Industries established a joint venture for tire polybutadiene rubber (BR) production and sales, Malaysian Synthetic Rubbers SDN.BHD. in Johor state. It was capitalized at about JPY 5.8 billion. Ube Industries owns 40% of the share, South Korea's Lotte Chemical Group 40%, Mitsubishi Corporation 10%, and Malaysia's Lotte Chemical Titan Holdings 10%. It will construct BR production plant with an annual production volume of 50,000 tons and plans to start its operations in 2014. In accordance with an increase in BR demand, the company also plans to increase the annual production capacity by additional 22,000 tons. By establishing a global supply base in Malaysia following those in Japan, Thailand, and China, it aims to cope with a rapidly developing market and increase its profit.

Sunrise Industry to delist its joint venture; to increase its investment ratio to expand business

 Sunrise Industry will delist its joint venture with Nichirin, Sunchirin Industries (Malaysia) Berhad in Selangor state, from the Kuala Lumpur stock exchange by August 2013. While Nichirin's investment ratio is to decrease from 20% to 15%, Sunrise Industry will increase its ratio to 85%, gaining initiative of car A/C hose ring production. In Thailand, China, India, and Indonesia, its new plants have been built under Sunchirin Industries (Malaysia)'s leadership. Through close cooperation with this company, Sunrise Industry plans to develop its Asian business and also establish a holding company for managing the entirety of Asia, including Japan, by the end of 2013. (Source: Press release in June 2013)

Toyo Rubber starts mass production at new tire plant in May 2013; introduces state-of-the-art production technique

 In May 2013, Toyo Rubber started operations of a tire plant of Toyo Tyre Malaysia Sdn Bhd in Ipoh city, Perak. It plans to export 85% of tires produced there and manufacture 2.5 million passenger car and small truck tires per year for each market in South East Asia, Middle East, Europe, and North America. By the end of 2015, the company plans to increase an annual production capacity to 5 million units and further to the 10 million-unit level in the future. At the new plant, quality equal to that in Japan has been ensured by increasing the ratio of automation, and the latest version of "ATOM"-the company's original production technique which has been introduced to enable high-mix low-volume production at low cost.

Tohken Thermo Tech to construct new building next to its existing plant to enhance production capacity

 Tohken Thermo Tech acquired a site 2.5 times larger than the current premises to construct a new plant at TOHKEN (M) SDN. BHD. in Negiri Sembilan state. This is to enhance its heat treatment facilities for transmission components such as planet and worm gears. With an investment of JPY 1 billion, the company aims to start partial operations in Spring 2014. Japanese suppliers in Malaysia and Thailand are now trying to shift the base of cost-intensive heat treatment to joint business with local suppliers specializing in this process. Tohken Thermo Tech aims to receive orders for this joint business and increase its sales from JPY 600 million in FY 2012 to JPY 1 billion in FY 2015.

Singapore

Teijin to stop part of high function resin production lines from October 2013

 In September 2013, Teijin announced that it will stop Teijin Polycarbonate Singapore Pte Ltd.'s one of four production lines for polycarbonate resin from mid-October 2013. The polycarbonate resin is used in exterior materials for home appliances and automobiles. This is in response to a deteriorating demand due to an economic slowdown in China and the poor performance of Japanese home appliance manufacturers. With this line's suspension, the company aims to reduce its fixed cost and improve productivity. Teijin is expected to post an extraordinary loss of JPY 2.4 billion during the April to September 2013 period.

The Phillippines

Furukawa Automotive Systems to construct new wire harness plant

 In May 2013, Furukawa Automotive Systems announced that it will construct a new plant to increase its wire harness production at a site next to an existing plant of Furukawa Automotive Systems Lima Philippines, Inc. in Batangas province. The plant will mainly export its products to Japan. The plant is also positioned as an important hub to hedge production risks in China such as rising labor costs and labor disputes. With an investment of JPY 2.5 billion, it aims to start partial operations in January 2014 and full operations in Autumn 2014. The company plans to double its total sales, including those from its existing plants from 2012 level to JPY 12 billion by 2015.

Mitsuba to construct new plant to increase motor component production

 Mitsuba will increase production capacity at Mitsuba Philippines Corporation in Cavite, Philipines, where labor cost is lower. To increase its production capacity of on-board small motor components, the company will construct a new plant next to its second plant producing motor components. This is to cope with increasing global production at its major automaker customers. To enhance cost competitiveness, products will also be supplied from the plant to production bases in other regions such as North America. It also aims to cope with a production increase by expanding production space through facility relocation in the existing three plants. (Source: report released in October 2013)

Yokohama Rubber completes first phase of expansion construction of passenger car and SUV tire plant; to start second phase

 Yokohama Rubber completed the first phase of expansion at YOKOHAMA TIRE PHILIPPINES, INC. (YTPI) in the Clark Freeport Zone in Pampamga province (to expand the annual production capacity by 3 million units). The plant started its operation in February 2013. Following this, the company started the second phase (to expand the annual production capacity by 2.5 million units) in May 2013, aiming to start full operations in 2014. With these additions, YTPI's annual production capacity is expected to reach 12.5 million units and most of this will be exported to North America, Europe, and ASEAN countries. Total investment was JPY 20 billion for the first phase and JPY 11 billion for the second.

Laos

Asahitec to establish joint venture for casted parts to supplement Thailand plant

 In April 2013, Asahitec announced that it will establish a joint venture to produce aluminum die casting such as engine parts, BMM Asahi Tec Co., Ltd. in Savannakhet province. The JV will be established jointly with a Lao company, BMM Group Co., Ltd (food wholesale, real estate company) on a fifty-fifty-basis. With an investment of JPY 4.5 billion, a plant will be built to start production of aluminum die casting in November 2014. The production capacity will reach 610 tons per month. All products will be supplied to Japanese OEMs and other customers in Thailand. This is to supplement production at its Thai plant and its production capacity combining two countries will be 1,800 tons per month.

Toyota Boshoku establishes company to produce seat covers and other interior parts; positions it as satellite plant for its Thai plant

 In April 2013, Toyota Boshoku established an automotive interior parts production company, TOYOTA BOSHOKU LAO CO., LTD in Savannakhet province and will construct a new plant with an investment of JPY 550 million. This new company is positioned as a satellite plant to supplement its Thai plant. In line with enhancement of seat production capacity at the Thai plant, part of manual labors for seat cover cutting and sewing processes will be transferred to the Lao plant. Production will start from April 2014 to supply products to the Thailand seat plant. The production capacity on a vehicle volume basis will be 200,000 per year.

Cambodia

Denso establishes production company for motorcycle sensor parts; also aims expansion to include automobile parts

 In January 2013, Denso established DENSO CAMBODIA Co. LTD in a special economic zone in Phnom Penh. It was capitalized at USD 300,000. Production of magneto (motorcycle generator) sensor parts started at a rented plant in July 2013, exporting products to its production base in Thailand. The company started production in Cambodia to supplement its Thai production in mid- to long- term. It also aims to expand its production items to include automotive components.

Marusan Kinzoku establishes company to produce wheel parts and export products to Thailand

 Marusan Kinzoku established a company to produce wheel and interior parts, Marusan Plastic Phnom Penh Co., Ltd., in a special economic zone in Phnom Penh. A new plant was built and went into operation in September 2013. The plant mainly produces automobile plastic components and metal construction materials. By utilizing this new business in Cambodia, the company aims to win orders from automotive suppliers concentrated in Thailand and other nearby countries. JPY 100 million was invested in this plant.

Myanmar

Asmo establishes production base for automotive small motor parts

 In September 2013, Asmo established ASMO Myanmar Co., Ltd in Yangon city, through joint investment with its subsidiary, ASMO Indonesia. It was capitalized at USD 2 million. Production of small motor-related parts will start at a rented plant from January 2014. The plant will be positioned as a support base for ASMO Indonesia and in charge of subassembly processes, which are difficult to mechanize. Materials will be supplied from Indonesia, assembled into components in Myanmar, and shipped back to the Indonesian plant. In its initial stage, the plant will begin with the assembly of washer hoses and gradually shift to assembly of brush holders. (Source: Press release in October 2013)

Source: Press releases and newspapers

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