Japan’s Nissei ASB keys up on India


Written on December 8, 2011 – 7:52 am | by hemroids

Japanese blow molding machine supplier Nissei ASB Machine Co. Ltd. sees India as an increasingly key part of its future, so it is boosting investment at its Mumbai factory and studying using that facility to expand into new businesses such as manufacturing components for other machinery companies, including those in the plastic industry.

Nagano, Japan-based Nissei ASB has seen sales from its Indian operation increase by 75 percent in the last three years, to more than 5 billion yen ($63.4 million), even as sales for the entire company are still down about 15 percent from before the 2008 financial crisis, to around 17 billion yen ($218.6 million), according to Kota Aoki, president and CEO.

Nissei ASB said earlier this year said it would spend $22 million to double size of its Mumbai factory, but the company now plans to spend about $25 million, an increase mainly due to the extra purchasing power that comes from the strong Japanese yen, said Aoki, in an interview at the International Plastic Fair in Tokyo.

The company said it is shipping increasing numbers of completed machines from India, both for cost and quicker lead times.

ASB first set up in Mumbai in 2000 as a low-cost manufacturing spot, and the move has given the company an alternative as it and other Japanese manufacturers struggle with rising domestic costs and weakened export competitiveness from the strong yen, which is hovering at near post-World War II highs.

“Growth in Japanese manufacturing now is difficult because of the yen,” Aoki said. “Of course we’re not going to go bankrupt but it does mean we cannot grow as planned.”

The India facility serves two purposes for the company: beyond building complete blow molding machines, it manufactures lower-cost machine components that it ships back to Japan for final assembly in its Japanese-made equipment.

It’s that second capability that the company thinks it can build on and branch out beyond blow molding, into supplying machinery components to other industrial equipment firms, including injection molding companies or other plastic-related firms.

Nissei ASB hopes to leverage its 11 years manufacturing in India and the cost advantages in the country, where a skilled machine setter will earn just 10 percent of their counterparts in Japan, said Paul Atkin, with ASB’s sales coordination team in the Nagano headquarters.

Aoki stressed that no final decision has been made, but the company was touting that capability, which it called its “India Manufacturing Program,” with dedicated staff answering questions in one corner of its sizable booth at the IPF fair, which was held Oct. 25-29.

It will make a final decision after assessing market reaction, executives said.

About 2 billion yen ($25.7 million) of the India factory’s sales come from the domestic market, the company said.

With China’s costs rising, Japanese manufacturers are searching for alternative manufacturing locations, but they remain leery of India, Aoki said.

“Many Japanese companies are afraid of investing in India,” Aoki said. “The biggest reason is the infrastructure is still not up to their requirements and expectations.”

Atkin said ASB has adapted to operating in India and no longer see infrastructure limitations, but rather sees benefits from its skilled workforce there.

At IPF, the company also discussed future technology development and unveiled new designs.

Related articles on WeblogPlaza

Tags:



Post a Comment

CAPTCHA Image
*