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Thailand’s rising labor costs draw Japan conveyor maker back

Maruyasu Kikai returns to partner with former joint venture, 18 years after exit

A Japanese conveyor maker is returning to Thailand after 18 years, teaming with a local player to tap demand for labor-saving equipment.

Maruyasu Kikai has formed a capital and business tie-up with MAE Systems Engineering (Thai) — formerly Maruyasu AE Systems Engineering, its name when it was established in 1995 by the Japanese manufacturer with a Malaysian partner.

Maruyasu’s return to Thailand comes amid rising wages there, which the company expects will fuel demand for equipment that can reduce labor costs.

After Maruyasu pulled out of Thailand in 2005 to focus on its home market, the venture changed its name to MAE and continued to produce and sell conveyors, while maintaining a limited relationship with Maruyasu.

This partnership has expanded. Under a deal announced in January, the Japanese manufacturer bought 10% of MAE’s outstanding shares.

The companies have begun personnel exchanges at the engineering level. MAE plans to start making two conveyor models under the Maruyasu brand in June through a licensing agreement.

Fumio Hayashi, a Maruyasu executive who has taken a board seat at MAE, expects ease of cleaning and maintenance — strengths of Maruyasu products — to be a selling point.

Within the Association of Southeast Asian Nations, Thailand in particular has many factories that do business with Europe and the U.S., Hayashi said. Western clients have high standards, including on safeguards against contamination, he added.

With only about 30 employees as of January, MAE is smaller than Maruyasu, which employs about 430 and booked sales of 11.7 billion yen ($88.2 million) last year.

But MAE “has strong networks with not only Japanese companies, but also Thai and Chinese ones,” Hayashi said.

Maruyasu is based in the city of Okaya, about 160 kilometers northwest of Tokyo.

Source: Nikkei