Japanese suppliers in Thailand (1): enhancement of production capacity

F-tech, Keihin, Clarion, G-TEKT, TS TECH, Toyota Boshoku, Piolax

2014/01/09

Summary

Thailand Map This is the first of two-part series of MarkLines' reports summarizing the establishment of new plants, enhancement of production capacity in Thailand by Japanese suppliers (for the period of ten months through the beginning of December 2013). From January to November 2013, 2.23 million vehicles were produced in Thailand (up 2.9% year-over-year (y/y)). The growth rate slowed down from 68.3% y/y in 2012, but the total production volume is sure to post a new record-high in 2013. The growth rate slowed down due to the negative impact of the termination of the government's incentives.

 Amid this environment, Japanese OEMs including Toyota, Honda, Nissan, and Suzuki, have started operations of new plants and have been enhancing production capacity at their existing plants from 2013 through 2015. Following these OEMs, Japanese suppliers have continued their aggressive investments in Thailand.




Japanese suppliers Related Reports:
Thailand (2) (Jan. 2014),
ASEAN
(Nov. 2013), 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)



Enhancement of production capacity and reorganization of production

Ishikawa Gasket automates production line for gaskets

 In August 2013, Ishikawa Gasket introduced a new design to automate a production line for new cylinder head gaskets at its subsidiary, Cherry Serina in Chonburi. Cherry Serina's plant began production in August 2013. The company plans to continue production with the same number of employees for the time being, but will shift to automation in line with the expansion of demand. This move is to respond to a lack of workers and to the difficulty of finding human resources due to higher personnel costs in Thailand. Ishikawa Gasket will automate the production line when it deems it necessary. After the new line operations stabilize, Ishikawa Gasket plans to consider the next potential production line.

H-one automates welding line at its Ayutthaya plant, also boosting stamping capacity of Chonburi plant

 H-one automates a welding line at a frame parts plant of H-ONE Parts (Thailand) in Ayutthaya. The company will introduce 116 new welding robots in 2013 and 2014 to increase the number by 1.8 times from that in 2012. This move is to respond to decreased profit due to higher labor costs and the expansion of production. H-one will also expand the H-ONE Parts Sriracha plant in Chonburi, which is currently devoted exclusively to welding. It plans to invest about JPY 1.3 billion to introduce a 2500-ton transfer stamping machine, eyeing the start of operations in February 2014. H-one is responding to a rapid increase in orders in Thailand and will also invest in improving the efficiency of welding line.

F-tech considering boosting stamping capacity

 F-tech is considering boosting the stamping capacity of F-tech Mfg. (Thailand) Ltd. in Ayutthaya. This move is to export stamping parts to F-tech's new suspension parts plant that was established in Indonesia in 2013 and to respond to growing demand in Thailand.

Elna boosts production capacity for aluminum electrolytic capacitors in 2013

 In September 2013, Elna announced that it had renovated and expanded the floor space of the Chiang Mai plant of TANIN ELNA CO., LTD (headquartered in Bangkok) to boost production capacity for aluminum electrolytic capacitors. The investment is worth JPY 300 million. Elna will increase production capacity by about 25% from the current 30 million units a month to 38 million units per month. With this move, it plans to enhance sales to Japanese electrical equipment suppliers in addition to European and US electrical equipment suppliers.

Oiles expands its bearing plants to boost production capacity

 Oiles Corporation will expand the existing bearing plant of OILES (THAILAND) COMPANY LIMITED (in Rayong) in FY 2013. Based on Oiles' overseas production expansion plan, its new plant in India started operations in April 2013. Oiles will expand its plants in Thailand, China, and the USA, introducing facilities depending on the number of orders. It expects to make a capital investment of JPY 3 billion in the four countries in FY 2012-2013. It has not unveiled production capacity.

Clarion boosts production of car audio and navigation systems

 Clarion will boost production capacity for car CD audio systems by 30% from FY 2012 to about 1 million units in FY 2013 at Clarion Asia (Thailand) Co., Ltd. in Rayong. The company will invest JPY 500-600 million by the end of March 2014 to add a production line. It will introduce automated machine for board assembly and dies. It also plans to increase production capacity to 2 million units in FY 2015, which is about twice that of the FY 2013 estimate. This move is to respond to an increase in production in Southeast Asia by major OEMs. As for car navigation systems, the company will lower overseas production in China to about 50% in a few years in order to avoid the risk of over-concentration in China (Chinese production currently accounts for 60% of the total production). The company plans to shift the lowered 10% amount to Thailand and increase the ratio of production in Thailand to 25%. It also plans to increase the production of in-vehicle cameras in Thailand.

Keihin introduces highly efficient new production line for ECUs to resume commercial production in June 2013, making Thailand its global supply base

 Keihin introduced a new streamlined production line for ECUs used in automotive engines at a Keihin Auto Parts plant (Thailand) in Ayutthaya, resuming commercial production in June 2013. The company will concentrate production of ECUs in Thailand for engines used in Honda's new flagship model that is marketed globally starting in 2013 This will promote economy of scale. Honda will also supply the product to Thailand, Japan, Asia, and Mexico. The plant also began increasing production of the DBW throttle body. Keihin will transfer production of parts for the Honda New Fit from Japan to Thailand to reduce costs by more than 20%. Keihin also sets up a local procurement and development base at Keihin Asia Bangkok Co., Ltd. in Bangkok in April 2013. It aims to promote local procurement and meet the local development by its customers.

Keihin Metal Industry expands its plant by 50% to boost production of automotive springs

 By the summer of 2014, Keihin Metal Industry will expand the building area of the plant of KEIHIN METAL (THAILAND) CO.,LTD in Patumtanee by 50% from the area of 2013, and will boost production of automotive springs. The investment is worth JPY 150 million. The investment is due to a new contract for seat springs from a Japanese automotive parts supplier. It aims to increase sales by 50% to JPY 1.5 billion in 2016.

Kodama Chemical Industry plans to increase production at its second automotive parts plant

 Kodama Chemical Industry plans to increase the ratio of overseas sales in the total sales to more than 50% as its strategy for business expansion in the ASEAN region. It is stated in its medium-term management plant (for FY 2013 to 2015). In Thailand, it plans to expand its automotive parts business at the second plant (completed in 2012, in Chonburi) of Echo Autoparts (Thailand) Co., Ltd.

Suncall Corporation plans to boost production capacity for valve springs by 100% in 2015

 Suncall Corporation will add a production line for engine valve springs at SUNCALL HIGH PRECISION(THAILAND) in Chonburi to boost production capacity by 100% from 2012 to 3 million units a month in 2015. The investment is worth JPY 150 million. This move is to respond to insufficient supply due to a rapid increase in new contracts. Suncall Corporation will also shift part of the production of valve springs from Japan to local production in Thailand to reduce transportation costs. It will start full-scale shipment from Thailand to neighboring countries including Indonesia and India.

G-TEKT adds investment in expansion of its second plant to start operations in 2014

 G-TEKT will add investment of JPY 1 billion in the expansion of a new plant in Chachoengsao that will start production in 2014. The new plant is the second plant of G-TEKT Eastern located in Eastern Seaboard Industrial Park in Rayong, which produces and markets auto body frame components. The second plant plans to supply auto body frame components to Toyota and Isuzu and will also supply to Honda's second plant which will start operations in 2015.

Shigeru expands plant with plans to start operations at end of 2013

 Shigeru will expand the plant of SHIGERU (THAILAND) Co., Ltd. in Rayong to increase production of automotive products including seats and interior trims parts. Shigeru is scheduled to start operations of the plant at the end of 2013.

Shiroki builds its second plant to start operations in May 2014

 Shiroki Corporation expanded its plant, SHIROKI CORPORATION(THAILAND) in Chonburi in 2012 to boost production capacity. Due to a significantly increased supply volume primarily to Toyota and Suzuki, Shiroki acquired a site and a building for its second plant for JPY 760 million near its existing plant in June 2013. The second plant is scheduled to begin operations in May 2014, boosting production capacity for wind regulators and seat frame parts.

Daido Metal starts operations of its third plant in November 2012, producing products including bearings for turbo chargers

 Daido Metal held an opening ceremony for its third plant, Dyna Metal Co., Ltd. in Chachoengsao in November 2012. The plant produces bearings for vehicles and for general industry, and bearings for turbo chargers that are used in small turbo. Daido Metal has boosted production capacity for these bearings. It has also secured a space for the introduction of new facilities at the first and second plants, which allows the company to boost the entire production capacity of its plants.

TANAKA SEIMITSU KOGYO makes Thai plant into mother plant

 TANAKA SEIMITSU KOGYO will transfer production for automotive parts including rocker arms from Japan to its Thai subsidiary, TANAKA PRECISION(THAILAND) Co., Ltd. in Lamphun to enhance cost competitiveness. The company will make the Thai plant its mother plant. The company will train employees of its new Indian and Vietnamese plants in Thailand, and will also provide production facilities and dies from Thailand to the plants. The company will also place a procurement manager in Bangkok, aiming to cut procurement costs. The company also hopes to speed up procurement processes. Materials procured in Thailand will first be used in Asia, but later may also be used in Japan. (reported in June 2013)

Chuo Spring announces construction of its third plant, starting production in June 2014

 In October 2013, Chuo Spring announced that it would construct a third plant of its subsidiary, CHUO THAI CABLE CO., LTD. in Rayong. The investment is worth JPY 700 million. The company is scheduled to start production of precision springs and control cables for vehicles in June 2014. With this expansion, the company will meet the increase in parts demand from Toyota and other automakers.

TS TECH establishes new company in December 2013, starting operations in March 2015

 In December 2013, TS TECH established a new company, TS TECH (Kabinburi) CO.,LTD. in Prachinburi. The new company is capitalized at JPY 2.5 billion. The company will construct a new plant, which is scheduled to start operations in March 2015.The plant will produce seats and door trims for Honda's compact cars that are produced at Honda's second plant in Thailand. TS TECH (Kabinburi)'s plant will  have a production capacity of about 200,000 units. Combined with the production capacity of 280,000 units at an existing plant in Saraburi of TS TECH (THAILAND), TS TECH's production capacity for seats in Thailand will increase to about 500,000 units a year in Thailand.

T.Rad to more than double production capacity for EGR coolers by FY 2017

 T.Rad will boost production capacity of EGR (Exhaust Gas Recirculation) coolers worldwide. The company expects the demand for the product will increase significantly as an item to improve the fuel efficiency of gasoline vehicles. By FY 2017, the company will boost its global production capacity by 1.8 times from FY 2013 level. It will more than double the capacity in Thailand. (reported in June 2013)

Tohken Termo Tech enhances heat treatment capacity for parts by expanding its plant

 Tohken Termo Tech will invest JPY 900 million by 2014 to add a heat treatment facility to its subsidiary, THAI TOHKEN THERMO CO., LTD in Chonburi. By adding the facility, it will prepare for full-scale commercial production of global strategic cars by Japanese OEMs in 2015 and beyond. It will set up a new exclusive production line for parts for gasoline direct-injection engines and facilities for vacuum hardening and annealing in the south area of its Thai plant. It will set up three mesh belt continuous furnace lines in the north area to respond to more contracts for heat treatment of hot forged parts used in engines and transmissions.

Toray plans to expand its plants by enhancing facilities for nylon fibers for airbags and making CFRP parts JV into its subsidiary

 In April 2013, Toray announced that it would enhance its production facility to produce nylon fibers for airbags at the Ayutthaya plant of Thai Toray Synthetics Co., Ltd. (Bangkok). The production capacity of the new facility is about 7,000 tons. The combined production capacity will be increased by 40% from the current capacity to about 23,000 tons. Operations are scheduled to begin in January 2015. This move is to respond to the increasing demand for air-bag's base cloths due to the rising installation rate of airbags in countries in Asia and emerging countries.
 In March 2013, Toray acquired a 75% share of the Dome Group's Thai production subsidiary, Dome Composites (Thailand) Co., Ltd. in Chonburi, making it into its subsidiary. The company announced that it would rename it as Carbon Magic (Thailand) Co., Ltd. Carbon Magic (Thailand) is a plant for producing the Carbon Fiber Reinforced Plastic (CFRP) parts and its accessories. Toray plans to expand the plant through this acquisition. Toray will secure a site in the industrial park where the plant is located or in an adjacent site to expand the plant to two to three times the current area. The company hopes to absorb the growing demand for CFRP products in Asia.

Toyota Boshoku transfers production of oil filters from Japan to Thailand/builds exclusive plant for non-Toyota customers

 Toyota Boshoku Corporation will totally transfer production of oil filters for automotive engines from Japan to Thailand and China. Production of oil filters for compact engines was transferred to TOYOTA BOSHOKU FILTRATION SYSTEM(THAILAND) CO., LTD. in Rayong in September 2013. Production of filters for mid-size engines had already been transferred to its plant in China. The company will transfer production of filters for large engines to its plant in China or Thailand in 2014 or later. With this transfer of production, it has developed a compact production facility that can save installation space by 30% and can reduce the inventory of intermediate parts This allows the company to minimize facility cost and to shorten the time needed for a switch from one product to another.
 In August 2013, Toyota Boshoku Corporation also announced that it would establish BOSHOKU AUTOMOTIVE (THAILAND) CO., LTD. in Rayong, a new production company for automotive interior parts, in November 2013. The new production company is considered to be the exclusive supply base for non-Toyota customers. Production is scheduled to begin in October 2014. The investment is worth JPY 1.8 billion. Their products include silencers, package trays, and luggage mats. The company will also produce seat components in the medium run.

Nihon Plast builds its second plant to produce interior and exterior parts in-house

 Nihon Plast plans to build the second plant on the premise of the Nihon Plast Thailand Co., Ltd in Rayong in FY 2014 to mold automotive interior and exterior parts in-house. It procures and assembles some of the parts, such as airbags and steering wheels from subcontractors. The company will produce many of those parts including consoles and fenders at the second plant while it plans to boost production of airbags and other products at its existing plant. The investment is estimated to be worth JPY 1 billion. (reported in September 2013)

Piolax opens its fourth plant, establishing regional headquarters for development and marketing in Southeast Asia

 In June 2013, Piolax acquired a vacant plant for JPY 400 million on an adjacent site of its subsidiary, PIOLAX (THAILAND) LTD in Rayong. With this plant, the company aims to boost production capacity of the subsidiary and meet the increasing demand for local supply from OEMs mainly in the ASEAN region. This plant will be the company's fourth plant. Piolax produces opening/closing parts including industrial fasteners and air dumpers and plastic tanks, but also plans to produce parts for Continuously Variable Transmissions.
 In July 2013, the company also established a new regional headquarters at PIOLAX (THAILAND) LTD in Rayong, which supervises the marketing and development of each of its businesses in Thailand, Indonesia, and India. The regional headquarters will maximize sales and improve the efficiency of development in each country. Piolax sets the sales target of JPY 10.6 billion in its business in Asia excluding China for FY 2015, which is about twice the sales in FY 2012.

Hitachi Chemical boosts production capacity of powder metallurgy products

 Hitachi Chemical will expand overseas production in its automotive parts business including powder metallurgy products and resin molding products. The company plans to increase the ratio of overseas production by 40% in three years. As part of this move, the company will build the second plant of Hitachi Powdered Metals (Thailand) Co., Ltd. in Chachoengsao to double the subsidiary's production capacity for powder metallurgy products. The new plant will start operations in July 2013.

Press Kogyo starts production of parts for heavy-duty trucks in August 2013

 Press Kogyo has won a contract for rear axle cases for heavy-duty trucks from an overseas truck manufacturer. It will expand the plant of THAI SUMMIT PKK BANGPAKONG CO.,LTD. in Chonburi to start production in August 2013. The investment is worth JPY 1.6 billion. At the outset, Press Kogyo will press and assemble the parts in Japan and send them to the Thai plant. The plant will initially only machine the axle case, which is the final step. The company will produce 3,700 units in 2013. The company will prepare the Thai plant to work on the entire process from pressing to assembly, and machining of the parts starting in 2014. Press Kogyo will boost annual production capacity to 18,500 units in FY 2016.

Marujun completes a new auto body parts plant in June 2014

 Thai Marujun is scheduled to complete the construction of a new auto body parts plant in the Nong-Khae Industrial Park in Saraburi in June 2014. The new plant will introduce a 1500-ton transfer press. It is located where it is less influenced by the flood to provide a stable supply. The investment is worth JPY 3 billion. The company considers the new plant to be a strategic base to cultivate customers across Southeast Asia as well as for existing customers in Thailand.

Mizushima Kiko doubles production capacity of its existing plant to start production of engine-related components

 Mizushima Kiko will add a lathe, a machining center, a grinder, and a heat treatment facility to a plant of Mizuki (Thailand) Co., Ltd. in Rayong by March 2014 to double production capacity. The investment is worth about JPY 350 million. The plant is currently producing mainly air conditioner-related parts. With this enhancement, it will start producing engine-related components to increase the number of production items.

Mitsubishi Aluminum adds a production facility for multi-hole aluminum extrusion tube for heat exchangers

 Mitsubishi Aluminum will add one extrusion press machine to MUANG-MAX (THAILAND) CO., LTD. (in Samut Prakan) that produces and markets a multi-hole aluminum extrusion tube for a heat exchanger. The press machine is scheduled to start operations in August 2014. The annual production capacity will be increased by about 2,400 tons to about 7,200 tons. The investment is worth JPY 790 million. In Southeast Asia, the production of vehicles has been increasing and aluminum air conditioning systems are increasing in use. This move is to respond to the future expansion of demand for multi-hole tubes.

Mitsubishi Heavy Industries enhances production capacity for turbochargers for passenger cars

 Mitsubishi Heavy Industries will boost its global production capacity of turbo chargers for passenger cars from 5.8 million units a year in 2013 to 10 million units by 2016, aiming to gain the top market share in the world. As the first step, the company will focus on the investment in the facilities on Mitsubishi Turbocharger Asia Co., Ltd in Chonburi. The company will substantially expand machining lines and assembly lines for producing cartridges, a core part of the turbocharger. The company aims to boost production capacity of cartridges by 150% from the current capacity to 5.9 million units a year by 2015, and supply the products to final assembly facilities in Europe and China. Since the demand for finished products for vehicle and truck manufacturers in Thailand is increasing, the company will also add a final assembly line to double production capacity in 2015.

Yamagen builds second plant for automotive parts

 Yamagen invested JPY 200 million to build the second plant for Yamagen (Thailand) Co., Ltd. in Ayutthaya at the adjacent site of its existing plant in October 2013. The company doubles the production capacity and enhances the marketing of automotive parts including spring parts for switches. Due to the decreased demand for the company's main products, parts for home appliances, Yamagen hopes to shift to automotive parts.

Yutaka Giken builds its second plant to boost production capacity for exhaust system parts

 Yutaka Giken will expand the YS TECH plant (THAILAND) in Prachinburi to boost annual production capacity of torque converters and silencers. It will also build a second plant in the adjacent Chachoengsao 304 Industrial Park in 2014, boosting production capacity for exhaust system parts including cata-converter, mufflers, and torque converters. With this enhancement, YS TECH(THAILAND) will boost its production capacity for cata-converters by about 60% from 2013 to 561,000 units a year, for torque converters by about 70% to 598,000 units, and for silencers by about 90% to 272,000 units. The company will construct the second plant in two stages to meet demands from Honda's production of 400,000 vehicles in Thailand.

Yokohama Rubber boosts production capacity for truck and bus tires

 Yokohama Rubber started the second-stage expansion work in July 2013 to boost production capacity for truck and bus (TB) tires at YOKOHAMA TIRE MANUFACTURING (THAILAND) CO., LTD. in Rayong. The second plant will be built on the adjacent site of the first TB tire plant. The company plans a total investment worth JPY 8 billion. With this move, it will boost annual production capacity from 350,000 tires in 2013 to 700,000 units in 2015. Production at the expanded plant will begin in April 2015 and full-scale production is scheduled to start in December 2015. YOKOHAMA TIRE MANUFACTURING (THAILAND) mainly produces and exports the products to North America, Europe, and Asia. Yokohama Rubber plans for an increase in sales of TB tires worldwide.

Yorozu Corporation starts operations of its second plant in June 2013 and full-scale operation will begin in second half of 2014

 Yorozu Corporation started operations of the second plant of Yorozu (Thailand) in Rayong in June 2013. The company will invest JPY 400 million by the second half of 2014 and will introduce a new painting line to start full-scale operations. The plant will boost production capacity for automotive suspensions to 300,000 units a year The combined production capacity with the first plant will be 800,000 units a year.


Source: Press releases and newspapers.

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