KAGA Expands Mexico Base to Meet New Demand

KAGA ELECTRONICS CO., LTD. will strengthen and expand its production base in Mexico in a bid to meet the increasing demand for electronics manufacturing services (EMS).

In addition to unit assembly and circuit board assembly, the company intends to make the new TAXAN MEXICO factory into an integrated production base. This includes component molding, sheet metal processing, and finished product assembly.

Most importantly, the aim is to capture local production demand for products intended for the U.S. market, where opportunities will increase in the future. In addition, it will also turn the Mexican operation into the largest EMS business base in the Group. It aims to have sales of ¥50 billion and approximately 2,000 jobs to be created within five years from the start of operation.

Purpose, Aim of New Factory

KAGA ELECTRONICS established TAXAN MEXICO S.A. DE C.V. as a wholly owned subsidiary and a production base for the EMS business in Mexico. Particularly, since its establishment in 2017, TAXAN MEXICO’s manufacturing activities have been focused on the assembly of lighting units used in four-wheeled vehicles. Moreover, the U.S. market is the primary target of these vehicles.

In addition, KAGA ELECTRONICS said it also expects to generate new orders from the assembly of circuit boards. Mostly, coming from the air-conditioning equipment segment in the United States.

The company expects these demands would warrant the need for new capacity and space. For that reason, it acquired new land in the nearby industrial park and start construction of a new factory.

KAGA ELECTRONICS expects to shell out ¥5 billion over the next five years for the investment, which includes land purchase and buildings. Furthermore, the company will also introduce the latest energy-saving equipment to promote manufacturing that is both highly efficient and environmentally friendly.