Nissin Electric Co., Ltd. started in January contract manufacturing of metal processing in its industrial equipment and components production. The order came from a Japanese semiconductor manufacturing equipment maker to manufacture base frames for its chip equipment.
Its Vietnam plant, Nissin Electric Vietnam Co., Ltd. (NEV), carried out cutting and welding of metal. These are then sent to its headquarter plant in Kyoto, where precision processing, surface treatment and inspection are conducted. The first shipment of base frames was also handled in Kyoto.
Equipment and Parts Solution Business
The company identified base metals as the first product of the Equipment and Parts Solution Business under its new medium-term management plan VISION2025 (FY2021 to FY2025).
The Equipment and Parts Solution Business handles contract manufacturing of equipment and components on a global scale. It also conducts market-in business, such as metal processing, in Southeast Asia. It was also the company’s first metal processing business to be marketed to other companies.
Metal Processing Business
Nissin Electric will pursue expansion of the metal processing business for sale to other companies. The company will carry out metal processing and welding at Nissin Electric (Thailand) Co., Ltd. (NET) and Nissin Electric Myanmar Co., Ltd. (NEM) as well as at its Vietnam plant. It will then send the products to the headquarter plant to carry out precision processing, and deliver them to customers.
The company has installed a high-precision cutting machine in the headquarter plant in preparation for the business. This is expected to enhance the plant’s precision processing capability.
It will also advance unmanned operation of automated machines. It will ramp up full operation of production equipment to reduce the cost of the working unit cost and improve cost competitiveness. These will be done alongside the expansion of orders in the metal processing business for other companies.
For FY2022, the company expects 800 million yen (US$6.94 million) in contract sales of metal processing from Japan only. It anticipates 8.5 billion yen (US$73.7 million), including orders from foreign companies.
Thus far, the Equipment and Parts Solution Business has handled contract manufacturing of industrial equipment and components and metal processing. It is being done under the Power Supply and Environment System Business at plants in Japan and abroad.
VISION2025 Medium-Term Goal
Under VISION2025, the company targets consolidated sales of 160 billion yen (US$1.39 billion) as a corporate-wide goal for FY2025. Of this, the Equipment and Parts Solution Business targets sales of 13.4 billion yen (US$116.19 million).
The company positions the metal processing business for other companies as the main business of the Equipment and Parts Solution business.
Nissin Electric taps the expertise of engineers and workers from overseas plants to the headquarter plant. This aims to convey their high technical capabilities, and skills to improve manufacturing capability of overseas plants. In this way, it can establish a system that carries out the entire manufacturing process, through precision processing, at the Vietnam, Thai, and Myanmar plants.
The environment of manufacturing has been undergoing major changes. In these circumstances, Nissin Electric has upgraded the Equipment and Parts Solution Business to become independent business segment in FY2021, the first year of VISION2025. The company plans to accelerate the expansion of the business by strengthening the three plants in Southeast Asia and increasing linkage with the production technology and processing group in Japan.