July 15, 2014 00:00 By Pichaya Changsorn The Nation
Sigma in talks with foreign makers for joint development, using Thai patented process
Sigma & Hearts, a leading automotive-parts maker with operations in Thailand and Indonesia, is discussing with Bosch, Valeo, and other global companies the joint development of a key component using its patented process developed in Thailand.
Sigma chairman Motoharu Nuka this year won approval from the World Intellectual Property Organisation to register his patent for a new process to manufacture the rotor cores of alternative-current generators, more commonly known as alternators, a key part in every automobile.
In an interview, Nuka said the breakthrough process would lead to development of a new-generation alternator that is more compact and lighter.
“We have been in discussions with Bosch and they are very interested,” he said.
Established by Nuka and two Thai shareholders in 1998, Sigma & Hearts manufactures small precision parts for motorcycle and automobile engines as well as brake components, steering systems and alternators. It engages in a full range of manufacturing processes, from die making and hot and cold forging to machining.
The small Thai parts company is the second- and third-tier supplier for automotive customers including Honda, Denso and Toyota, as well as supplying other industries such as electrical appliances and multi-purpose engines.
Nuka said his invention stemmed from a drive to escape endless cost competition as auto-parts companies have been pressured by automobile companies to cut their prices every year.
“We don’t want [to be in the] cost war. We want a quality war,” he said, adding that innovation was a better way to bring down prices than mere cost-cutting.
In the case of the alternator, Bosch has acknowledged that there have been no new developments for this particular part for 100 years, he said.
Nuka said the patent would bring a “new era” for Sigma because no other firm can produce the new-generation rotor core, of which every automobile uses two and which needs to be changed about every five years. Nevertheless, the development may take some time, since it requires a total change in the production process.
The company is working with the Virginia Polytechnic Institute and State University in the United States to analyse and verify the efficiency and benefits of the new rotor-core production process.
Employing about 660 people, Sigma reports annual sales revenue of about Bt1.3 billion. The company earns about 14 per cent of total revenue from exporting its auto parts to Japan, China, Indonesia, and the US. It has spent more than Bt10 million on research and development for the rotor-core project alone.
Sigma president Morakot Sinhabaedya said the firm, like other automotive companies in Thailand, had received some impact from the slowdown of the domestic automobile market. Nevertheless, its growing operations in Indonesia helped offset the sales slump in Thailand, she said.
The company made its first overseas expansion four years ago, setting up Sigma & Hearts Indonesia to supply motorcycle parts to Astra Honda and other clients in that country.
“We have expanded to Indonesia, which has outgrown Thailand in the motorcycle market. Four years ago, the Thai motorcycle market totalled 2 million units, and Indonesia’s was about 6 million. Today, Indonesia’s has become 8 million units, and Thailand’s stayed about the same, at 2 million units,” she said.
Until now, Sigma & Hearts Indonesia has engaged in the final machining process for parts manufactured in and supplied from the Thai factory. But when the Asean Economic Community comes into effect at the end of 2015, the company may reverse the roles, to have its Indonesian factory perform as the source of parts to its Thai facility, she said.
Sigma & Hearts donates 1 per cent of its profits to Her Royal Highness Princess Maha Chakri Sirindhorn every year for her charity activities.