Casio opens new plant at Thai complex

Corporate July 10, 2014 00:00


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CASIO (THAILAND), one of the Japan-headquartered company's bases for the manufacture of watches, on Tuesday officially opened a new factory for calculators and electronic dictionaries at its complex in Nakhon Ratchasima.

The move is in line with the policy set by its parent company to reduce dependency on its largest facilities in China and Hong Kong, which now control 80 per cent of the supply of Casio watches and electronic goods in the global market. Japan supplies only 10 per cent of Casio products around the world.

Casio also wants to diversify business risks with the balance of its major manufacturing facilities, which are in Japan, China, Hong Kong and Thailand. In the near future, the supply contribution of Casio products to the world market will be equally shared by its Chinese/Hong Kong and Thai facilities.

Costing more than Bt1 billion to establish, the opening of the new calculator and electronic dictionary facilities adds to the existing two watch factories at the Nakhon Ratchasima site.

Casio (Thailand) started operations at the plant in 2012 following the massive flooding late in the previous year, which had seriously affected its factory at the Navanakorn Industrial Estate in Ayutthaya.

The new plant did in fact commence production of calculators last month, while electronic-dictionary output will kick off in October.

The plant currently employs about 1,800 workers, but the number will rise to 2,400 when the production line for electronic dictionaries is up and running.

Fumitsune Murakami, senior executive managing officer and member of the board of Casio Computer in Japan, said the expansion of manufacturing facilities in Thailand was in line with the headquarters’ strategy of strengthening its Asean supply chain.

Casio’s manufacturing facilities in Japan are now producing more complicated products, such as watches, projectors and handheld terminals, he said.

The company’s largest manufacturing sites – in the Chinese city of Shenzhen and Hong Kong – produce watches, calculators, electronic dictionaries, and musical instruments, such as electronic pianos.

In the Kingdom, Casio (Thailand) moved to its current 140,000-square-metre site in Nakhon Ratchasima in 2012 to allow for possible subsequent expansion of the functions performed by the company.

The move helped to distribute risk more broadly among Casio production bases and ensure greater capacity for the company to handle future increase in demand from outside of Japan, said Murakami.

“With the expansion of our manufacturing facilities in Thailand, we will be able to diversify unexpected risks occurring in one particular country by shifting our production to another site so that our overall business will not be seriously affected,” he explained.

At the beginning of the expansion phase, about 10 per cent of Casio product manufacturing in China will be moved to the Thai facilities this year, he added.

Sadao Karisasu, former managing director of Casio (Thailand), said that in light of the Asean Economic Community, which comes into full effect next year, Casio Computer would be sourcing more parts and components for the manufacture of watches and electronic products from Thailand and neighbouring countries, such as Cambodia, Vietnam and Malaysia, in order to reduce its dependency on China.

All Casio output in Thailand will be exported to its distribution base in Shenzhen, before being dispatched to many markets around the world.

“Despite any political unrest in the country, I sincerely believe that deep in the heart of Thai people, they don’t want to quarrel or fight with each another. They love to be peaceful and have friendship,” said Karisasu.


Labour costs

He said it was still worthwhile for the company to expand its facilities in Thailand despite the increase in local labour costs.

“The cost of labour in Thailand rises by 5 per cent per year, while we will be able to increase our production capacity by 7 per cent every year. In China, labour costs increase by 14 per cent per year, so in the long term, labour in Thailand will be quite cheaper than in China,” he said.

Karisasu, who has been in Thailand for eight and a half years, will leave the country this month to take up a new executive position at Casio Computer headquarters in Japan.

His successor is Shuji Daiba, former factory manager of Casio (Thailand), who took up the top executive position on June 21.

At its site in Nakhon Ratchasima, the factory complex is capable of handling all aspects of watch production, from plastic moulding through assembly. The plant was able to produce 800,000 wristwatches last month, and about 600 different types of Casio watch are manufactured at the facility.

The decision to add a third factory at the site was made to help ensure an even more stable supply of multiple products from the company. The factory will have the capacity to produce 1.1 million calculators and electronic dictionaries a month, with about 300,000 calculators in nine designs and functions set to be manufactured at the site this month alone.

The expandable lay-out is designed to accommodate increased volume, and new items in the future will enable more flexible production under a global manufacturing system, said Karisasu. About 35 per cent of the total land area at its complex in Nakhon Ratchasima is still vacant for future expansion, he added.

“We supply the products manufactured here to more than 100 countries around the world. We believe these new manufacturing facilities will be the key not only to expanding our business, but also to contributing to the economy and job opportunities of the local society. We also hope we can enhance awareness of the Casio brand and become further accepted by Thai people,” said Daiba.