Japanese Firm to Build Tijuana Plant
Kyowa American Corp., the American subsidiary of a Tokyo-based firm that makes plastic cabinets for television sets, is the latest among an increasing number of Japanese companies to decide to manufacture at a Tijuana maquiladora.
Kyowa American, based in Costa Mesa, has purchased an 8-acre tract in the Tecolotes section in Tijuana, administrator Terry Nagura confirmed in a telephone interview. Kyowa’s plans call for construction to start on a 100,000-square-foot building in April and for manufacturing to begin by November.
Maquiladoras are foreign-operated plants where goods destined mainly for the U. S. market are manufactured or assembled with low-cost Mexican labor.
“Labor costs in Mexico are one tenth of what they are in America,” Nagura said when asked the reasons for the move. Kyowa, however, will not lay off any of its 400 employees at two plants in Irvine and Costa Mesa once the Tijuana plant opens, she said. Instead, Kyowa will expand the line of products made in its Orange County plants.
Sales of $125 Million
Kyowa American is an injection-mold plastics manufacturer whose clients include Sony, Hitachi and Mitsubishi television manufacturers. The company makes cabinets ranging in screen size from 45 inches for Mitsubishi’s giant sets to 13 inches for the popular Sony model. Closely held parent company Kyowa Electric & Chemical posted worldwide sales last year of about $125 million, Nagura said.
To supply its Japanese TV manufacturer customers in the United States, Kyowa has had operations here since 1973. Kyowa transferred its plant to Irvine from Atlanta in 1978, then opened another plant in Costa Mesa in 1986, Nagura said.
Kyowa is one of many “second wave” Japanese companies moving to Tijuana to be closer to manufacturer customers already there, including Sony, Sanyo, Hitachi, Matsushita and others. Nagura said she did not know how much Kyowa will invest in the plant.
The new plant will at first employ about 100, growing to 400 or 500 workers by late 1994, Nagura said. The land Kyowa bought can accommodate another 100,000-square-foot building, sources said. Kyowa’s plans do not call for an office or plant on the San Diego side of the border.
Once the Tijuana plant is operating, Kyowa plans to begin making additional, smaller plastics products at its Orange County plants, including parts for typewriters, facsimile machines and household appliances, Nagura said.
One of Tijuana’s largest industrial parks at 825 acres, Tecolotes is a development of ATISA Group of Tijuana. The park will eventually include 3 million square feet of industrial buildings plus residential and commercial structures.
