Wednesday, March 6, 2013
YKK To Lift Capital Spending 50% On Hopes For Asian Growth
TOKYO (Nikkei)--YKK Corp. has sharpened its focus on Southeast Asia and China as part of plans for 252.8 billion yen in group capital investment over the next four years through fiscal 2016, up roughly 50% from the previous four.
Under a medium-term business plan released Tuesday, the leading zipper and fastener manufacturer will invest 127 billion yen in the fastening business, up 65% from the preceding four years. China and other Asian markets will account for roughly 60% of that total.
"We need to accelerate expansion in Asia" to capture demand in the market for high-volume apparel, Chief Executive Officer Tadahiro Yoshida told a news conference.
The Japanese group intends to invest 32 billion yen in China as part of efforts to supply a broader range of clothing. Other Asian markets, including Oceania, will likely account for 42 billion yen in investment, including some 5 billion yen for a new Indonesian materials plant slated to go onstream in November 2014.
In the architectural products business, which mainly supplies building materials, YKK will focus harder on window-related products and renovations. To broaden the product lineup, the company will spend 3.4 billion yen to build a new window plant in Miyagi Prefecture that is due to begin operations in June of next year.
YKK's renovation operations now have a network of 1,000 stores in Japan. Amid tough competition, the firm will seek to enhance the quality of the services provided at these outlets to better respond to customers' needs.
In the U.S., YKK will broaden its sales network from the Southeast to the Midwest. It will aggressively expand in China as well.
Both the fastening business and architectural products business face intense price competition, so YKK seeks to increase added value in its offerings to secure profits.
The company is shooting for sales of 689.5 billion yen in fiscal 2016, up 21% from the fiscal 2012 projection, and an operating profit of 56.2 billion yen, a 72% gain.
(The Nikkei, March 6 morning edition)