Japanese suppliers in Thailand: Strengthening production capacity and R&D function

Activities of Aisin AW, Akebono Brake, Sumitomo Rubber Industries, Toyota Boshoku, NSK and others

2015/09/17

Summary

Thailand Map・This report summarizes activities of Japanese parts suppliers in Thailand in one year to late August 2015.
・In the January to July 2015 period, automobile production in Thailand remained stagnant at 1.1 million units, marking a year-over-year (y/y) drop of 0.2%. This is mainly because the domestic sales volume dropped by 15.8% to 430,000 units in this period under a slow economic recovery due to sluggish consumption and export as well as stricter loan screening by banks. The export, on the other hand, showed a relatively solid growth of 4.1% y/y to 678,000 units. Despite of such weak sales in Thailand, Japanese OEMs with their global export hubs in this country have not made any significant changes so far to their plans for production capacity expansion.

  ・Toyota revised its 2015 sales target for Thailand downward from the initial target of 330,000 units to 280,000 units in July. As for exports, the automaker is trying to increase the volume by fully redesigning its Innovative International Multi-purpose Vehicle (IMV) pickup trucks for emerging markets.

  ・ Nissan started operations at its new Thai plant in July 2014 and intended to offset declining sales in Thailand with exports. However, the OEM has failed to increase exports, resulting in a lower production than its original plan. However, in the future, Nissan expects higher plant utilization and is considering establishing a supplier park near the new plant. The establishment is expected to reduce Nissan's parts procurement cost and enhance its competitiveness.

  ・ Honda intends to postpone its plan to start operations at its new  plant within 2015 to March 2016.

  ・Mazda launched operations at its automatic transmission (AT) plant in Thailand in January 2015 to supply products to its automobile plants in other countries as well. The OEM will also start operations at its new engine plant in October 2015.
 ・ Following these movements of automakers, Japanese parts suppliers have been actively expanding their production capacities and items to support growing demand and increase exports in Thailand. New entries by Tier 1 and Tier 2 suppliers have also continued. Some suppliers will establish regional headquarters and enhance development functions in the country.

Activities of Japanese suppliers in Thailand

New entries Aisin AW (ATs), JSP (foamed polypropylene), Sutai (impregnation of cast parts), Daido Steel (forged transmission parts), Toyo Advanced Technologies (oil pumps), Toray Hybrid Cord (fiber materials for timing belts), Nitta (hose and tube products), Pioneer/Increment P (digital maps), and Fukuju Industry (engine parts)
Enhancement of production capacities New plants:
Kyowa Kogyo (universal joints), JVC Kenwood (in-vehicle cameras), Taiho Kogyo (vacuum pumps), Diamond Electric Mfg. (ignition coils), TBK (parts for commercial vehicle engines), NiKKi Fron (clutch parts), Meidoh (bolts), Yasunaga (connecting rods), and Univance (transfer units)
Plant expansion:
Shin-Etsu Chemical (silicon monomers) and Sumitomo Rubber Industries (tires, etc.)
Facility expansion:
Aichi Steel (forged parts), Asahi Tec (aluminum wheels), Oiles Corporation (bearings), San-En (continuously variable transmission parts), Jidosha Buhin Kogyo (propeller shafts, etc.), Sumitomo Electric Industries (aluminum wires), NSK (electric power steering), Mitsuchi (industrial fasteners), and others
Expansion of production items Akebono Brake and Mohka Mfg. (establishment of a new company for cast-iron brake caliper parts), Kobe Steel (considering establishment of a new joint venture for wire rods), Sanyo Special Steel (establishment of a new company for formed bearing materials), Chuo Spring (technical cooperation agreement with a local parts supplier on suspension parts), Toyota Boshoku (establishment of a new company for interior parts), Nishikawa Rubber (glass run channels), Nisshinbo Brake (establishment of a new company for commercial vehicle brakes), NGK Insulators (establishment of a new company for ceramics for exhaust gas purifiers), and Nihon Plast (construction of a second plant for plastic parts)
Reinforcement and restructuring of businesses Nippon Piston Ring (setup of a global supply hub for valve seats in Thailand), Hitachi Chemical (merging four consolidated subsidiaries), Furukawa Automotive Systems (establishment of Southeast Asia headquarters), and Mitsubishi Materials (establishment of Asian headquarters)
Development and technical centers, etc. New establishment: Omron (design and development department for in-vehicle products), Kasai Kogyo (development center for interior parts), and The Yokohama Rubber (tire development center)
Expansion/enhancement: Denso (increase of engineers)

Sources: Press releases by each company


 For activities of Japanese suppliers in Southeast Asian countries other than Thailand, please refer to "Japanese suppliers in Southeast Asia: Abundant opportunities for growth" posted in April 2015.


Japanese Supplier Reports:
* Europe (Aug. 2015)
* Mexico (Jun. 2015), Mexico and Brazil (Jul. 2015)
* Southeast Asia (May 2015), the U.S. (Mar. 2015)
* China (Part 1): Southern, Central and Southwestern regions (Jan. 2015)
* China (Part 2): East/North/Northeast regions and overview (Feb. 2015)
* India (Nov. 2014)
* Thailand (Sep. 2014)



New plant construction by Aisin AW, JSP, Daido Steel, Pioneer, and others

Company Activities
Aisin AW
Constructing AT plant to start operations in 2017
In January 2015, Aisin AW established its wholly owned subsidiary in Chonburi, AW (Thailand) Co., Ltd., with a capital of THB 2 billion. The company will complete a new AT plant to start operations in July 2017. JPY 10 billion will be invested to develop an annual production capacity of 120,000 units. The plant will produce ATs for rear-wheel drive vehicles and supply them to Toyota. In addition, the supplier aims to expand its sales channel to other Japanese OEMs like Isuzu and Mitsubishi Motors to fully utilize its production capacity. The new plant will also work as an export hub for neighboring countries to meet growing demand for ATs in the ASEAN region in the future.
JSP
Establishes new plant for foamed polypropylene materials to start operations in January 2016
JSP has established JSP Foam Products (Thailand) Co., Ltd (tentative name) in Samut Prakan. The new plant is expected to start operations by January 2016 to produce a foamed polypropylene material, P-Block, for Japanese OEMs and suppliers operating in Thailand. To meet growing demand in this country, JSP has decided to start local production to replace exports from its subsidiary in Singapore. The plant will have an annual production capacity of 1800 tons, with an investment of JPY 600 million.
Sutai
Sets up impregnation plant for cast components in 2014
In 2014, Sutai established Sutai Thailand Co., Ltd. in Rayong to start operations at a new impregnation plant. Impregnation is a process to repair blow holes, which are generated during production of automotive and other cast components, by sealing them in with impregnating fluids. The company invested JPY 500 million to establish its first subsidiary outside Japan to satisfy increasing demand in Thailand. Previously, Sutai had exported and sold impregnating equipment and fluids from Japan. The company expects monthly sales of several ten millions of Japanese yen from Japanese OEMs and local companies.
Daido Steel
Establishes new company for forged transmission parts in January 2015
In January 2015, Daido Steel established a production and sales subsidiary for forged transmission parts in Chonburi, Daido Steel (Thailand) Co., Ltd. It was capitalized at THB 550 million. The new plant is expected to start operations in March 2016 and will be provided with state-of-the-arts high-speed hot forging equipment to enhance its supply capacity in the ASEAN region. The plant will have a monthly production capacity of 1,000 tons, with a total investment of JPY 3 billion. The new subsidiary will also be responsible for sales of products and support of group companies that will start operations in Thailand in the future.
Toyo Advanced Technologies
Opening ceremony held at new oil pump plant for Mazda's ATs in December 2014
In December 2014, Toyo Advanced Technologies opened a new plant of Toyo Advanced Technologies Automobile Components (Thailand) Co., Ltd. in Chonburi. The new plant is located within an existing plant of Mazda's AT production subsidiary, MPMT, which launched operations in January 2015. The new plant supplies oil pumps for Mazda Skyactiv-Drive models. JPY 1.2 billion was invested to build the plant with an annual production capacity of 400,000 units. This is the supplier's first plant outside Japan.
Toray Hybrid Cord
Planning to jointly establish subsidiary that produces and sells fiber materials for timing belts in 2016
Toray Hybrid Cord established a sales office in Thailand in April 2015. Within two years, the company further plans to establish a subsidiary to produce and sell fabric materials that reinforce timing belts, most likely in Thailand, jointly with a local company. Investment in plant construction is expected to reach JPY 2 billion to JPY 3 billion. The supplier aims to achieve sales of JPY 5 billion in Asia in 2020.
Nitta
Establishes new production subsidiary for hoses and tubes in March 2015
In March 2015, Nitta established Nitta Corporation (Thailand) Limited in Rayong to expand its sales of hose and tube products in ASEAN countries. The subsidiary was capitalized at JPY 786 million. The new plant is scheduled to launch operations in February 2016.
Pioneer/ Increment P
Sets up digital map production joint venture (JV) in January 2015 to support its car navigation business
In January 2015, Pioneer's subsidiary, Increment P, established a JV in Bangkok with a local map company, MappointAsia (Thailand) Public Company Limited. The JV, named Increment P Asia Co., Ltd., was established to create and manage digital map data of the ASEAN region. It was capitalized at THB 14.8 million, with 74% owned by Increment P and 26% by MappointAsia. Pioneer plans to utilize the map data to be created by this JV for its car navigation and related service businesses in Southeast Asia.
Fukuju Industry
New plant starts producing engine parts in September 2014
In September 2014, Fukuju Industry started operations at a new plant of Fukuju Industry (Thailand) Co., Ltd. in Rayong, which had been established in May 2013. JPY 3 billion was invested in the plant. The plant will produce fuel injection pump and other parts and supply them to Japanese suppliers operating in Thailand. Sales in the initial year are expected to be JPY 1.6 billion.

 

 



Increase in production capacities by Sumitomo Rubber, NSK, and others

Company Activities
Aichi Steel
Substantially increasing production of forged engine and transmission parts for Toyota's new IMVs in 2015
Aichi Steel newly installed a 4,500-ton stamping machine at Aichi International (Thailand) Co., Ltd. in Chonburi in December 2014 and started producing forged crankshaft parts for Toyota's new IMVs. The plant has an annual production capacity of 24,000 tons. In the future, the supplier intends to gradually attract new customers, including agricultural and construction machine manufacturers. In March 2015 and later, 1,600-ton and 3,000-ton stamping machines and new screw press are also starting operations to substantially increase production of forged engine and transmission parts for new IMVs. In 2016, Aichi Steel plans to expand the annual production of forged parts nine times the 2014 level to 18,000 tons.
Asahi Tec
To increase production capacity for aluminum wheels, with export increase also being planned
Asahi Tec Aluminium (Thailand) Co., Ltd. in Samutprakarn will increase the annual production capacity for aluminum wheels at its Bangpakong plant in Chonburi from 900,000 units in 2015 to 1.3 million units by the end of March 2017. Currently, products are mainly supplied to Japanese OEMs operating within Thailand, but the supplier aims to expand its sales to Japanese automakers' plants in Europe and the U.S. as well to increase exports.
Oiles Corporation
Planning to increase bearing production capacity by 2020
Oiles plans to increase the sales ratio to makers outside Japan in overall bearing sales to 40% by 2020 from the current level of over 10%. To achieve this goal, the supplier will expand the production capacities at its plants outside Japan such as in the U.S. and Thailand, including Oiles (Thailand) Company Limited in Rayong. Oiles intends to increase its bearing sales from JPY 43.1 billion in the fiscal year ended in March 2015 (FY 2014) to JPY 57.9 billion in FY 2019.
Kyowa Kogyo
Own new plant starts operations in February 2015 to double production capacity for universal joints.
In February 2015, Kyowa Kogyo started producing universal joints at its own newly constructed plant. Previously, this product had been produced at a rented plant by Thai Kyowa GMB Co., Ltd., its JV in Prachinburi with GMB. JPY 600 million was invested in this new plant to nearly double the monthly production capacity to 200,000 sets. The supplier plans to expand sales to Japanese OEMs other than Honda, its current major customer.
San-En
Doubling production capacity for continuously variable transmission (CVT) parts to start supply in Mexico in 2015
San-En currently produces CVT parts for the Thai, Japanese, and Chinese markets at San-En (Thailand) Co., Ltd. in Chonbur. In summer 2015, Mexico was added as its supply destination. To cover this increase, the supplier is installing additional numerically controlled lathes and other equipment to expand its production capacity. This expansion is doubling its annual capacity to 120,000 units from the previous level.
JVC Kenwood
New plant for in-vehicle cameras under construction to start operations in summer 2015
In March 2014, JVC Kenwood added a production line for in-vehicle cameras at its existing plant of JVC Optical Components (Thailand) Co., Ltd in Nakhon Ratchasima to increase the production volume. Within the same premises, the company is constructing a new plant, which is scheduled to be completed in July 2015. The construction was decided because demand for in-vehicle cameras is expected to grow in line with an increase of advanced driver assistance systems used in Asia. Investment in this project amounts to several hundred millions to one billion of Japanese yen. In the future, JVC Kenwood intends to expand the annual production to 10 million units.
Jidosha Buhin Kogyo
Expands production capacity for propeller shafts and engine parts in 2014
In 2014, Jidosha Buhin Kogyo introduced production equipment for propeller shafts and diesel engine parts at Jibuhin (Thailand) Co., Ltd. in Chonburi. Propeller shafts are produced to meet new orders from Japanese passenger car manufacturers, with an annual production capacity of 200,000 units. JPY 1.8 billion was invested in this expansion. The supplier will continue to seek new orders for passenger car parts because more than 80% of its sales currently come from commercial vehicle makers. Meanwhile, diesel engine parts are supplied to Isuzu.
Shin-Etsu Chemical
Production capacities for silicon monomers and other silicon products to be expanded by 2017
Shin-Etsu Chemical will complete the expansion at a plant of Asia Silicones Monomer Limited in Rayong by 2017 to increase its annual production capacity for silicon monomers by 50% from 70,000 tons in FY 2014 to 105,000 tons. The company will also increase the annual production of silicon polymers, which are produced at a different plant in a nearby site, by 40% to 74,000 tons in the same period. JPY 20 billion will be invested in this project. The enhancement is a part of the company's plan to increase its production capacities outside Japan to expand its silicon business.
Sumitomo Electric Industries
To increase production capacity for aluminum wires to achieve integrated production
Sumitomo Electric Industries (SEI) will expand the capacity to produce automotive aluminum wires at SEI Thai Electric Conductor Co., Ltd. in Rayong to increase the monthly production five times the 2014 level to 300 tons in September 2016. The company decided the expansion to satisfy growing demand in China and other Southeast Asian countries, its export destinations. At the same time, SEI will introduce equipment for casting and rolling aluminum wire rods to establish an integrated production system for aluminum wires within the same premises. JPY 7.3 billion will be invested in this project.
Sumitomo Rubber Industries
To expand production capacity for passenger car tires by 2016
Sumitomo Rubber Industries (SRI) will increase daily production of passenger car tires at Sumitomo Rubber (Thailand) Co., Ltd. in Rayong from 76,000 units at the end of September 2014 to 100,000 units in 2016. The company will expand the building of the existing first plant, which is based on a new production system, to add eight production lines. SRI will also expand the production equipment at the second plant, which uses a conventional production system. Also at its mold plant, a machining center and other equipment will be added to almost double the annual production from the 2014 level to 1,250 molds by the end of 2016. Furthermore, Sumirubber Thai Eastern Corporation Co., Ltd. in Udon Thani will increase the annual production at its rubber processing plant from 3,500 tons in 2014 to 3,800 tons in 2015 or later. This plant processes natural rubber into rubber materials for tires.
Taiho Kogyo
New vacuum pump plant starts production in February 2015; gasket production also starts at different plant
In February 2015, Taiho Corporation of Thailand Co., Ltd. in Pathum Thani started producing vacuum pumps at its new plant in Prachin Buri. Taiho Kogyo established this first assembly plant outside Japan to receive increasing orders for Toyota's new IMVs. JPY 700 million is being invested to start full-scale production in 2016 to achieve sales of JPY 3 billion, up 50% from the 2013 level. The company is also considering producing bearings in the future. Meanwhile, the supplier started producing diesel engine gaskets for IMVs at Nippon Gasket (Thailand) Co., Ltd. in Pathum Thani in April 2015, to which Taiho Kogyo had transferred its gasket business. Sales are expected to increase from JPY 856 million in FY 2014 to JPY 1.81 billion in FY 2015.
Diamond Electric Mfg.
Establishes second production and sales base for ignition coils in December 2014
In December 2014, Diamond Electric Mfg. established its second base for ignition coils in Thailand, Diamond Electric Asia Pacific Co., Ltd. The subsidiary was established to consolidate ignition coil plants into Thailand, following cancellation of construction of a new plant by its Indonesian subsidiary. The Thai subsidiary was capitalized at JPY 500 million. Its plant is located in Chachoengsao and the sales office in Bangkok. The plant is scheduled to begin operations in November 2015, with an annual production capacity of 3 million units. JPY 280 million was allocated as the fund to start operations at the second Thai base. The fund had been budgeted for construction of a new plant in Indonesia initially. The company's first Thai base is Diamond Electric (Thailand) Co., Ltd. in Ayutthaya.
TBK
Constructing new plant to enhance capacity to produce engine and other parts for commercial vehicles
TBK is constructing a new plant on a site next to the existing plant of TBKK (Thailand) Co., Ltd. in Chonburi. The supplier plans to increase its capacity to produce parts for commercial vehicles by 1.5 times by 2018, including engine water pumps, lubricating oil pumps, and brakes. The new plant is expected to be completed in September 2015 and to start full-scale operations in the first half of 2016. TBK aims to enhance its supply capacity to the ASEAN region, with a focus on Thailand, through an investment of JPY 3.78 billion.
NiKKi Fron
Starting operations at second clutch parts plant
NiKKi Fron is starting operations at the second clutch parts plant of NiKKi Fron (Thailand) Co., Ltd. in Chonburi in 2015. Previously, pre-processes for clutch facings to be produced in the first plant were carried out in its plant in Japan, including applying durable resin to glass fibers, which are used as bases of facings. The company is establishing an integrated production system in Thailand by transferring these processes from Japan to the second Thai plant. The investment is worth JPY 300 million. The second plant has a monthly production capacity of 250,000 to 280,000 sheets. NiKKi Fron decided the transfer to meet growing demand for used cars in Asian countries.
NSK
Enhancing production capacity for electric power steering (EPS)
In FY 2015, NSK aims to increase its global production volume of EPS systems by 7% y/y to 9.1 million units. To this end, the company plans to install additional production lines in the U.S., China, and Thailand while starting in-house production of components such as crossed helical gears and electrically controlled units. In Thailand, NSK is expanding the production capacity at Siam NSK Steering Systems Co., Ltd. in Chachoengsao to meet increasing demand for column-type EPS systems.
Mitsuchi
To enhance production capacity for industrial fasteners
Mitsuchi plans to increase its sales of industrial fasteners such as pins and bolts outside Japan from 20% in the fiscal year ended in June 2014 to 30% in the fiscal year ending in June 2016. As part of this plan, the company is considering installing one forging machine worth JPY 100 million to JPY 200 million at a plant of Thai Mitchi Corporation Ltd. in Pathumtani. A capital investment of JPY 500 million is planned for Thai Mitchi in the fiscal year ending in June 2016 to receive new orders from Japanese OEMs. Mitsuchi also aims to expand exports to Indonesia and other neighboring countries as well as to increase in-house production and improve production quality.
Meidoh
New plant starting operations in 2015 to increase bolt production capacity
Meidoh is relocating and expanding an existing plant of Siam Kato Co., Ltd., its JV in Samutprakarn with Kato Screw. In 2014, the JV's capital was raised from JPY 60 million to JPY 560 million, with Meidoh's shares increased from 9% to 90%, and the name changed to SK Meidoh Thailand Co., Ltd. The additional investment is being used to construct a new plant, which is planned to start operations in April 2015. The new plant will produce high-strength bolts and high-performance engine bolts. The monthly production is expected to be increased to 100 tons in FY 2015 and further to 300 tons in FY 2018. Meidoh aims to achieve sales of JPY 1 billion in FY 2018.
Yasunaga
To add production lines at new plant to increase production of connecting rods
In January 2015, a new plant of Yasunaga (Thailand) Co., Ltd. in Rayong started producing connecting rods, with three production lines in operation. Production started after the company had won orders for connecting rods from Toyota as the OEM remodeled its strategic vehicles for emerging countries. Furthermore, Yasunaga is preparing two more production lines to start operations within 2015 with an additional investment of JPY 1 billion to meet production increase of the strategic series. This expansion will increase the monthly production capacity from 150,000 units to 250,000 units.
Univance
To construct own new plant to enhance production capacity for transfer units
Univance plans to construct a new plant near Univance (Thailand) Co., Ltd. in Chonburi, which is currently producing transfer units at a rented plant. The new plant is expected to start operations in 2016, with production equipment transferred from the rented plant. The supplier decided the construction to meet production increase of vehicles for export at its customers, Nissan and Ford. The annual production capacity will be increased 1.5 times from the current 400,000 units. The investment will amount to JPY 1.5 billion. Sales are expected to increase from JPY 6 billion in FY 2014 up to JPY 9 billion when the new plant starts full-scale operations.

 

 



Expansion of production items by Kobe Steel, Toyota Boshoku, and others

Company Activities
Akebono Brake and Mohka Mfg.
Establishes new JV for cast-iron parts to start production in 2016
In October 2014, Akebono Brake and Mohka Mfg. established a JV in Ratchaburi, A&M Casting (Thailand) Co., Ltd. Akebono Brake owns 74.9% of the shares while Mohka Mfg. owns 25.1%. The new plant will start operations in August 2016 and mainly produce cast-iron brake caliper components for Akebono Brake (Thailand) Co., Ltd. Until 2017, the plant will produce 600 tons of components per month. In 2018 and later, Akebono Brake intends to expand the monthly production to 1,300 tons in view of market trend. The company is also considering expanding sales to other cast-iron parts suppliers in Thailand. It plans to invest JPY 2.2 billion in this project.
Kobe Steel
Agrees with local company on considering establishment of wire rod production JV
In June 2015, Kobe Steel agreed with Millcon Steel Public Company Limited in Thailand on jointly considering establishment of a JV for rolling and selling wire rods. Kobe Steel is expected to acquire 50% of shares in Thai Special Steel Industry Public Company Limited in Rayong, a maker of steel wire rods acquired by Millcon in 2014. Kobe Steel and Millcon will discuss and consider the outline of the JV, such as expansion of production equipment and the amount of investment.
Sanyo Special Steel
Establishing production and sales company for formed bearing materials
In September 2015, Sanyo Special Steel is establishing a fully-owned subsidiary in Samut Prakan to produce and sell lathe-turned rings for bearings. The new subsidiary, named Siam Sanyo Special Steel Product Co., Ltd., is located within the premises of the company's another subsidiary, SKJ Metal Industries Co., Ltd. The new subsidiary was capitalized at JPY 1.3 billion and expected to start operations around October 2015. Group plants in Japan and China will export forged rings and steel pipe cut rings to this new plant, which will then lathe-turn and sell them to Japanese bearing manufacturers. The new plant is being established as part of the company's initiative to reinforce its non-steel material business.
Chuo Spring
Signs technical cooperation agreement with local parts supplier for suspension parts to develop supply capacity for suspension springs
In May 2015, Chuo Spring signed a technical cooperation agreement with a Thai spring supplier in Samut Prakan, Bangkok Spring Industrial Co., Ltd. (BSK), on development and manufacturing of suspension parts. Under the agreement, Chuo Spring will improve BSK's quality, pricing, productivity, and production control for coil springs, stabilizer bars, leaf springs, and other parts to develop its supply capacity for suspension springs in Thailand.
Toyota Boshoku
Plant of new interior parts subsidiary officially opens in February 2015 to start producing interior parts
In February 2015, Toyota Boshoku officially opened a new plant of Boshoku Automotive (Thailand) Co., Ltd. in Rayong, which had been established in November 2013. The plant produces interior parts such as silencers, package trays, and luggage mats. The investment is worth JPY 1.8 billion. In the future, the supplier aims to expand its seat and door trim businesses as well as to meet orders for component units.
Nishikawa Rubber
To start first production of light-weight rubber products used on door glass frames outside Japan
Nishikawa Rubber will start production of glass run channels, which are light-weight rubber products to be mounted on door glass frames outside Japan. The supplier currently produces this product only in Japan, but intends to support production increase outside Japan by Japanese OEMs to receive local orders. In Thailand, Nishikawa Rubber is introducing production equipment at Nishikawa Tachaplalert Cooper Ltd. in Nakornratchasima to start production within FY 2015. In addition, equipment investment will gradually be carried out at its plants in China, Indonesia, India, and Mexico to start production by FY 2017. The company intends to increase the global sales of this product from JPY 9 billion (estimate) in FY 2015 to JPY 12.5 billion in FY 2017. The total investment is expected to reach JPY 1 billion.
Nisshinbo Brake
Establishes second Thai subsidiary to start producing commercial vehicle brakes in December 2014
In December 2014, Nisshinbo Brake started producing drum brakes for commercial vehicles at a new plant of its second Thai subsidiary in Rayong, Nisshinbo Commercial Vehicle Brake Ltd. Products are mainly shipped within Thailand and to Indonesia. JPY 1.5 billion was invested in this plant. Enhancement is also being undertaken at its first Thai subsidiary in Rayong to expand its production capacity. This subsidiary, Nisshinbo Somboon Automotive Co., Ltd., produces friction materials and passenger car drum brakes.
NGK Insulators
Sets up production subsidiary for ceramics for exhaust gas purifiers in May 2015
In May 2015, NGK Insulators established a subsidiary in Samut Prakarn to produce ceramics for automotive exhaust gas purifiers. The new subsidiary, named NGK Ceramics (Thailand) Co., Ltd., was capitalized at THB 1.35 billion, with 95% owned by NGK Insulators and 5% by Sumitomo Corporation. A new plant will be constructed to start operations in April 2018. Initially, the plant will produce Honeyceram substrates. Then, through gradual capital investment, it is expected to produce two types of diesel particulate filters, cordierite and silicon carbide. The capital investment by 2020 is estimated to reach JPY 50 billion.
Nihon Plast
Second plastic parts plant starts operations in 2014
Nihon Plast constructed a second plant of Nihon Plast Thailand Co., Ltd in Rayong, which globally supplies air bags, plastic interior/exterior parts, and leather-wrapped steering wheels. The plant was established to start in-house production of plastic components, which had previously been produced by a local company. The plant started operations in 2014 to meet growing demand and requests for QCD (Quality, Cost, Delivery time) from customers. Although 70% of the current sales at this Thai subsidiary are generated from its group companies, Nihon Plast plans to enhance the ratio of its sales from external companies to 50%.

 

 



Business reorganization, new regional headquarters, and development centers

Company Activities
Nippon Piston Ring
To start using Thai subsidiary as global supply hub for valve seats in late 2015
In the latter half of 2015, Nippon Piston Ring plans to start using Siam NPR Co., Ltd. in Saraburi as its global supply hub for valve seats. After its Indonesian subsidiary starts local valve seat production in 2015, the Thai subsidiary, which currently supplies valve seats to Indonesia, will have an excess capacity of 1 million units per month. To utilize this capacity, the Thai subsidiary will supply products globally when demand in other markets such as North America and India exceeds local plants' capacity.
Omron
To establish design and development department at Thai plant in FY 2016 to locally complete specification changes and other tasks
Omron has positioned Omron Automotive Electronics Co., Ltd. in Ayuthaya as the mother plant for its automotive business in the ASEAN region. In FY 2016, the company will newly establish a design department at this Thai plant to handle specification changes of parts for Thailand and other ASEAN countries. This will enable complete customer support within Thailand. In the future, the department is also expected to support production launch of new parts at plants in other countries like Indonesia and India.
Kasai Kogyo
ASEAN development center opens within Thai plant in January 2015
In January 2015, Kasai Kogyo opened an ASEAN development center within a plant of Kasai Teck See Co., Ltd. in Ayuthaya. In addition to the already provided design function, several experiment facilities will be installed in the new center within 2015, together with increased staff and development capacity. This enhancement will strengthen the company's integrated production from designing to manufacturing of door trims and other interior parts produced in the ASEAN region.
Denso
To increase engineers by 50% by FY 2015
By FY 2015, Denso will increase the number of engineers at its technical centers in emerging countries (China, India, Thailand, and Brazil) by 50% from the current level to 600 in total. With this move, the company aims to identify local customer needs in each country and expand own possible application development to receive more orders.
Hitachi Chemical
Merges four Thai consolidated subsidiaries in April 2015 to enhance its overall operations
Hitachi Chemical merged its four consolidated subsidiary in Thailand in April 2015 to enhance its corporate functions including marketing, sales, production, material procurement, finance, human affairs, and governance. The merge is also expected to improve customer service and operational efficiency. As a surviving company, Hitachi Chemical Asia (Thailand) Co., Ltd. in Chachoengsao absorbed Japan Brake (Thailand) Co., Ltd., Hitachi Storage Battery (Thailand) Co., Ltd., and Hitachi Chemical (Thailand) Co., Ltd. The trade name of the surviving company was changed from Hitachi Powdered Metals (Thailand) Co., Ltd. and its capital was increased from the previous JPY 2.49 billion to JPY 7.1 billion. Its businesses include production and sales of powdered metal products, friction materials, and batteries as well as export and sales of functional materials.
Furukawa Automotive Systems
Establishes Southeast Asia headquarters in February 2014 to oversee product design and sales
In February 2014, Furukawa Automotive Systems established its Southeast Asian headquarters in Bangkok, Furukawa Automotive Systems Asia Pacific Co., Ltd. The new headquarters started operations in July 2014, with a capital of THB 20 million. The headquarters supervises design of wire harnesses for new models as well as sales and procurement in Southeast Asia. With this establishment, the company aims to develop an optimal parts procurement network in this region to enhance its cost competitiveness.
Mitsubishi Materials
Asian regional headquarters starts operations in April 2015
In April 2015, Mitsubishi Materials launched operations at Mitsubishi Materials Southeast Asia Co., Ltd. This new subsidiary was reorganized from its former Southeast Asian business support center in Bangkok, which had supervised each group company in South and Southeast Asia. The subsidiary was capitalized at THB 10 million and manages 26 local companies in this region, including Thailand, Malaysia, Indonesia, Vietnam, and India. The new headquarters support communication of business policies, activities to enhance corporate governance/compliance, and cross-divisional marketing.
The Yokohama Rubber
Establishes tire development center in April 2015
In April 2015, the Yokohama Rubber established a tire development center in Thailand. Another development center will also be established in the U.S. to develop a four-hub structure in the world, together with the existing centers in Japan and China. The structure is expected to facilitate globalization of tire development to better meet the needs of customers in each area in the world.

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