Japan's largest aluminium rolled product manufacturer UACJ Corporation is looking at the Southeast Asian market to compensate for the slow growth in the domestic market. The company wants to revive a struggling Thai unit under this plan, which President Miyuki Ishihara expects to turn profitable despite the threat from Chinese supply.
"The investment is temporarily weighing on the unit's earnings," he said, while also pointing to "high transport and energy costs." Ishihara said in an interview. However, he pinned his hope on the plant considering greater-than-expected demand.
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"But the turnover rate of local employees is declining, and we expect to turn a profit by the end of 2019."
UACJ plans to invest about 90 billion yen (US$796) million to boost aluminium capacity in Thailand. A 37 billion yen investment, according to him, will increase aluminium production from the current 180,000 tons to 320,000 tons by June 2019.
UACJ also built a new R&D facility in Thailand in order to improve operational performance.
The group plans to expand in the south Asian market in order to increase pre-tax profit by 130% from 2018 to 45 billion yen by FY 2023.
"To that end," Ishihara said, "it would be important for us to meet strong aluminium demand in Thailand and other Southeast Asian countries."
Ishihara is concerned about the trade war and the influx of Chinese products into Southeast Asia and other regions. The company, he says will "deal with the situation by cutting other costs." He believes stable quality and prices give UACJ an advantage over others. The President thinks there is a lot to do in terms of nurturing personnel and building an organization.
He also highlighted the need of the use of artificial intelligence (AI).
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