Nachi-Fujikoshi moves part of its production to Thailand

Nachi-Fujikoshi Consolidates General Purpose Bearing Production In Thailand To Reduce Operating Costs

 

Nachi-Fujikoshi, the major Japanese automotive bearing manufacturer, plans to relocate some of its standard bearing production to Thailand from the facilities in Toyama and Taiwan. The move is in response to the declining demand from automakers for standard bearings, which are shifting to using electric engines instead of combustion engines.

                                                          Photo: Nachi-Fujikoshi plant in Thailand

Nachi-Fujikoshi will build a new 10 billion yen ($ 80.74 million) plant next to its existing facility in Thailand’s Rayong province. The production of the standard bearings will be relocated to the new plant. The facility is planned to start the activities in February 2022. The aim of the project is seen as production cost reduction. The company plans to use the savings for new investment projects for the machine tool and non-automotive manufacturing industries.

The transfer of production to Thailand is expected to require the reduction of about 200 jobs at the Toyama plant, including contract workers. According to the company’s financial statements, at the end of November 2020, the Toyama plant employed approximately 2,200 workers, including temporary workers.

Nachi-Fujikoshi plans to double the share of bearings manufactured in Thailand to 40% of total production by the end of 2022. The rest of the factories in Japan and other countries are planned to focus mainly on custom-made bearings, while the Toyama line will focus on products with increased durability.

Due to the increasing number of car manufacturers who change from internal combustion engines into electric drives, the consumption of bearings is decreasing in the automotive industries. Traditionally, cars with internal combustion engines have 100 to 150 bearings, which is 30% to 40% less in electric vehicles. This prompts major component manufacturers to optimize their manufacturing operations.

In the fiscal year ending last November, bearings accounted for 32% of Nachi-Fujikoshi’s sales, or 201 billion yen. The company produces 60% of bearings for automobiles, and the rest goes to manufacturers of machine tools and other industrial equipment. Nachi-Fujikoshi aims to cut production costs of its bearings by 20% and find new buyers for its products among manufacturers, primarily of industrial equipment. The company aims to increase the share of orders for the industrial sector to 60% of the total volume. The company will maintain a competitive edge through its reputation for quality and high technology.