Figures show an increasing preference towards Thailand and other south-east Asian countries over China as a site for their expanding operations. Yet on the whole the number of projects from Japan into south-east Asia has decreased significantly since 2008. 

Experts describe a combination of factors including rising wages and production costs, a series of worker strikes and labour shortages as reasons to reconsider using China as their low cost export base.  

Advertisement

fDi Markets' 2009 data shows Thailand as the leading recipient of Japanese manufacturing projects and has figures almost equal to those of China in the 2010 data. Vietnam and Indonesia have already augmented their numbers of manufacturing projects in 2010 compared to 2009.

Among the investments tracked by fDi Markets, Ajinomoto Thailand, a subsidiary of Japan-based food seasoning maker, Ajinomoto, has announced it plans to expand its production facility in Kamphaeng Phet, Thailand. The company plans to invest Bt3.4bn to expand monosodium glutamate production at the factory. Daio Paper, a Japan-based company primarily engaged in the manufacture and sale of paper pulp products and processed paper products, plans to spend around Y3bn to build a plant in Thailand for disposable baby diapers. The plant, Daio's first overseas, will be located in the Chonburi province, and will have a monthly production capacity of 16 to 18 million units. Production is expected to commence in 2011, with shipments beginning in March 2012. And Astra Honda Motor (AHJ), Honda's joint venture company in Indonesia responsible for motorcycle production and sales, plans to set up a new manufacturing facility at the same site as another of its factories in Indonesia. The new Rp760bn facility will become operational in the second half of 2011 and will have an annual production capacity of 500,000 units, bringing AHJ's total capacity in the country to 4 million units. The facility is expected to create around 1000 jobs.