KAGA ELECTRONICS CO., LTD. has confirmed that its new factory project in Mexico earned the nod of Japan’s Ministry of Economy, Trade, and Industry (METI). Particularly, it passed qualification for the government agency’s Indo-Pacific and Central-South America Regional Supply Chain Involvement Support Project.

For that reason, Kaga Electronics’ new Mexican facility will get a maximum ¥100 million subsidy.

The Indo-Pacific and Central-South America Regional Supply Chain Involvement Support Project is a subsidy scheme implemented by METI. Essentially, it encourages business initiatives that contribute to increasing the resilience of supply chains. Specifically, between Japan and the Indo-Pacific and Central-South America regions.

Boosts Production, Logistics Capabilities

In August last year, the company, through its wholly-owned subsidiary TAXAN MEXICO S.A. DE C.V. is strengthening and expanding its production base to meet the increasing demand for EMS in Mexico.

Since its establishment in 2017, TAXAN MEXICO’s EMS business has been focusing on the assembly of lighting units used in four-wheeled vehicles. Particularly, intended for the U.S. market.

In addition to meeting an increase in orders from existing customers, the construction of this new factory aims to acquire new customers requiring the assembly of circuit boards. Particularly, for use in air-conditioning equipment for the U.S. market. Moreover, the company sees this as an opportunity to install the latest energy-saving equipment. Thus, promoting manufacturing that is both highly efficient and environmentally friendly.

In the future, the company plans to expand its integrated production capability. That is, encompassing component molding, sheet metal processing, and finished product assembly functions.  These will be on top of the current unit assembly and circuit board assembly.

Through the introduction of a system enabling the visualization of internal factory data and data linkage between the Company’s global network of EMS bases in 10 countries, including Japan. Furthermore, the Company plans to meet production demand for the North American and Central-South American markets, where the company foresees continued growth.
By promoting local and localized production, the company will reduce transportation times and control logistics costs with the new Mexico plant as a start. Moreover, the company will solidify its aim to contribute to the construction of resilient supply chains.  Particularly, for the stable provision of products to the market in collaboration with its customers and suppliers.

-12 April 2024-
 *This is an English translation of a Japanese article originally published in the April 8, 2024 issue of Dempa Shimbun Daily.