Japanese machine makers pull out all the stops

The Japanese International Plastics Fair (IPF) show, held in Tokyo’s Makuhari Messe, from 28th October to 1st November, had 776 exhibitors (470 from Japan and 306 from overseas) exhibiting over a gross space of 54,000 sq m. The visitorship was slightly lower than the 2011 exhibition, but nevertheless Japanese producers had plenty on show.

Lower turnout of visitors due to multiple factors

The organiser, IPF Association, of the triennially-held show expected a better turnout of visitors this year (with a target of 45,000 visitors), compared to the 2011 show. The lower visitorship in 2011 was attributed to the earthquake in Japan.

However, at the end of the five day show this year, the visitor count was 39,376, down by about 5% compared to the 41,591 visitors at the 2011 show.

There were no natural calamities in Japan this year (thank God!), so why the lower turnout? According to an IPF official, “The show period was held at the very end of the month. Many companies were busy working out their monthly sales and closing their accounts. This prevented people from coming to the show, not only from the management level but also white and blue-collar workers.”

Furthermore, the official explained that the Monday (3rd November) after the show was a national holiday and since Japanese workers are known for their industrious nature, “they would probably have taken the opportunity to use the long weekend to go on a holiday.”

He also said that as the previous record shows, Friday afternoon is the busiest for the show but, unfortunately, a train accident happened on the Friday of the event. Trains from the Tokyo main station to Makuhari Messe stopped running completely for a period of time. “Many people who had planned to come to the show in the afternoon could not come. We assume the number was hundreds, maybe more than 1,000 even,” explained the spokesperson.

Hence, IPF probably learnt a lesson or two: not to have the show too close to the end of the month or when there is a public holiday looming!

But a silver lining on the cloud is that the foreign visitor count was up by 3,631, compared to 2,154 in 2011. The currency devaluation of the yen against the US$ (part of “Abenomics” – the policies effected by Japanese Prime Minister Abe to overcome years of deflation and lacklustre growth) has led to a decline in prices of Japanese machinery (compared to European technology). This, coupled with the fact that the weather was unusually warm and pleasant in Japan for this time of the year, probably attracted more foreigners to visit the show!

Asian markets a draw factor

CNCs, robots and injection moulding machine maker Fanuc depends on the Asian market for its sales, with the region taking up almost 60% of its exports, said Hiroyuki Uchida, Senior Executive Vice-President of the Robomachine Business Division. “In fact, the Asian market has been growing since 2000. Sales in Southeast Asia, especially in Thailand, Indonesia and Philippines, are growing better than China,” he added.

The Mt. Fuji-headquartered company, which was recently named one of the top 100 innovative companies in the world by Forbes, expects consolidated sales of around 500 billion yen this year. “Sales are up because of the depreciating yen. Yes, it has helped!” said Uchida enthusiastically. He also said that while Fanuc holds the “number one spot in the world” for its robot sales, injection moulding machinery output has also increased to 3,000/year.

The company still produces its machinery in Japan, with assembly of some products undertaken at a Chinese plant in Beijing; and robot system integration in Shanghai and the US. “We have around 45 branches worldwide, but none undertake any “real” production. This is because of the high cost and the need to ensure quality performance of the machinery produced. It is easier to undertake robotisation than transplanting technology to other countries,” said Uchida, referring to the Mt Fuji facility’s use of robots in the production process.

Another company enjoying the spill over from the currency depreciation is Niigata Machine. “We are doing well in the US market. We are selling an average of 28-30 machines/month,” said Denny Yanagibashi, General Manager of the Marketing Department. As for Asia, he said, “Sales are growing in China, India, Thailand, Philippines and Vietnam. Malaysia and Indonesia need a further push.” When asked if the company would follow the trend of setting up facilities in growing markets, Yanagibashi said, “We used to have factories in China, India and Thailand but closed them down. At that time we were making hydraulic machines that require a lower input of technology. Now, that there is a trend for all-electric machines, we may consider setting up a facility in China.”

Meanwhile, Toshiba Machine started up a facility in Rayong, Thailand, early this year, adding to its other facilities in China and India. “We are making all-electric machines in the 50-350 tonnes range, targeted at the medical and consumer markets,” said Jun Koike, General Manager of the injection moulding machine division. Currently, it has a staff force of 70 and expects to increase this to 200 over the next two years.

In India, in 2012, it bought over Indian firm L&T Plastics Machinery. Toshiba India has a facility in Chennai, where it makes around 600 machines/year. But even with its overseas facilities, Toshiba still exports 80% of the 2,000 machines/year it produces from its home base, especially targeting special machinery for production of light guide panels in China.

Another company focused on export markets is Toyo Machinery & Metal. “We export 70% of our output all over the world,” said Tatsunori Morikawa, Manager of the Marketing Team. He also pointed out that the company has a facility in China, in Changshu, where it produces around 20 standard-design machines/month. Plus, it is looking at setting up a facility in India. “It is a huge market with good potential.”

Generally, Toyo is seeing a growth of 30% in Asia. “This is because of the Chinese market, and is mainly focused on the smartphone sector. There are a number of Japanese and South Korean transplants in China who request special machinery,” explained Morikawa...

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