Major Japanese firms said yesterday they are shifting production lines to China from Southeast Asia to cut costs and consolidate their assembly operations.
High-tech giant NEC Corp said it planned to close a personal computer production line in Malaysia and move it to China.
"By doing this we can use common parts for the domestic and international market," said NEC spokesman Chris Shimizu.
China is closer to Japan which makes it a more convenient location and it is often cheaper to assemble whole products there, he said, adding the firm will likely consider further similar moves in the future.
"It is a case by case decision, there is no reason that everything should go to China but if the costs merit, then we will consider it," Shimizu said.
Seiko Epson Corp, which has made scanners for personal computers in Singapore since September 1995, will close a production line there in September and transfer some production to China as well as another plant in Singapore.
"Labor costs are cheaper in China and also the technological know-how is high," said Seiko Epson spokesman Akida Yamada.
The firm decided to shut the Singapore line -- laying off 700 staff -- because the business environment was tough and it was hard to make a profit, he said.
Similarly, camera maker Minolta Co Ltd plans to move a camera assembly line from Malaysia to a factory in Shanghai, China, by March of next year.
"At the moment we are totally restructuring our camera business," said Minolta spokesman Ichiro Shirai.
Minolta has a plant for high-end models in Japan, one for compact cameras in China and a third for more basic types in Malaysia.
"We plan to move the Malaysian line to China in fiscal 2002, but shall keep producing camera parts in Malaysia," Shirai said.
"It was a cost cutting decision," he said, adding that there would be layoffs in Malaysia, although he would not give numbers.
Japan's Minebea Co Ltd, the world's largest miniature ball bearing parts manufacturer, relocated a measuring equipment production base to China from Singapore in February because it was cheaper and a lot of its customers had moved there, said spokesman Yasuaki Miyahara.
"We also think we will be able to expand our operations there," he said. The Singapore line had been profitable but the move by many competitors to China had increased pressure on the company.
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