News
Japanese fastener makers in Thailand are entering a period of transition. With the sluggish Thai economy, rising personnel expenses, and depreciated currency that causes domestic competition in Japan, Japanese makers with overseas bases are forced to shift high value-adds of their products.
Many Japanese assembly makers see Thailand as the manufacturing center in Southeast Asia and set up bases there one after another. Their target of transaction (namely the SMEs) follow suit and set up plants there as well. Currency appreciation was continuing until November 2007, during which period Thailand had been the most popular target for base establishment.
According to the survey revealed by Data Bank (Japan), the number of Japanese companies in Thailand climbed 0.6% from 1,735 in November 2011 to 2,198 in February 2014, and among them, 30 were mostly domestic and mid-scale fastener companies scattering across southern Thailand (Bangkok suburbs, Chonburi, Rayong). The deployment of mid/large-scale companies is more or less completed. Due to depreciated currency, profit derrived from local production is becoming less. Given the situation, the foreign entrance of fastener makers has saturated, and some fastener makers even plan to withdraw due to economic reccession.
With the saturated entrance of makers, the upcoming entrance of electroplating plants is foreseeable. Large-scale makers are the first ones that entered Thailand, half of which have in-plant molds and the capability for electroplating and heat treatment. Mid-scale Japanese makers that entered during the peak time (2011) of currency appreciation mostly did not have in-plant molds and electroplating/heat treatment equipment. Although the benefit for Japanese mold makers is that product delivery form Japan to Thailand only takes a day, on the down side they have to compete with Taiwanese makers there. Additionally, there are more and more Japanese electroplating companies entering Thailand alone, some of which even try not to have any production line in bases in Japan in order to differentiate from other rivals.
