Japan's Kaga Electronics to open 2nd Thai plant to expand contract manufacturing

05, Sep. 2019

BANGKOK, NNA - Japan’s Kaga Electronics Co. will launch a second production plant in Thailand to expand its contract manufacturing business in Southeast Asia in response to growing customer demand.

The new plant of Kaga Electronics (Thailand) Co., its wholly owned subsidiary, is scheduled to start operations in December, targeting sales of 10 billion yen ($94 million) within two years from its startup, the Japanese company said in a statement on Tuesday.

The facility will be constructed using a rented building and land in the Amata City Chonburi Industrial Estate in the eastern province of Chonburi, with an investment of about 500 million yen, the statement said. It will have a total floor area of about 5,300 square meters and be located close to the subsidiary’s first production plant, which started operations in 2012.

The second plant will manufacture electrical circuit boards for multi-function printers and single-function printers. It is due to employ 200 workers and the number may be increased to a maximum 350, the statement said. The plant’s products will be sold mainly to Japanese companies based in Thailand, a Kaga Electronics spokesman said.

The company has decided on the new construction to meet “requests from existing customers for production expansion” and “orders from new customers,” the statement said.

It has also taken into consideration “possible moves by manufacturers to relocate production out of China to the ASEAN (Association of Southeast Asian Nations) region in order to avoid the impact of U.S.-China trade issues,” the statement added.

Kaga Electronics considers EMS (electronics manufacturing services), whereby it manufactures electronic devices for other companies under contract, as a core driver of its growth and has 16 EMS production plants in 10 countries and territories.

Among them, overseas plants are primarily based in China and the ASEAN region. Some of them have been built in Mexico, Vietnam, Turkey and India since 2017. The production base in India, a country which had been previously covered by shipments from the first Thai plant, started mass production in April this year.