Expansion Management

Manufacturers Heading to Southeast Asia

Aug. 20, 2014

Companies such as Foxconn, Samsung, and Toyota are setting up operations in ASEAN countries.

Southeast Asia is looking very attractive to manufacturers who had made China their base of operations in Asia. From increasing labor costs, to quality issues as well as other concerns, manufacturers such as giant Foxconn to Samsung have announced they will be moving to other countries in Southeast Asia.

Arno Maierbrugger of Gulf Times reports on recent developments.

Technology giant Foxconn, Apple's contract manufacturer and also assembler for Sony, Nokia and other big brands, has signed a letter of intent to invest $1billioni in new manufacturing plants in Indonesia to diversify its production away from China, where it presently employs some 1 million people.

Samsung Electronics has also said it will expand its operations to Indonesia and soon start building a factory there to the detriment of its Chinese assemblers. The South Korean electronics giant was recently granted a license to invest $1billion into a new smartphone and tablet manufacturing base in Vietnam, a country which has also seen substantial investment in manufacturing from Mitsubishi in the recent past.

Toyota has been stepping up production in its plant in the Philippines and has said it will boost its presence in Indonesia with investments totaling $1.3bn until 2017. A new Toyota engine plant was opened in West Java earlier this year. India’s car maker Tata Motors has also decided to make Indonesia its manufacturing and distribution base for the region and move away from China.

Camera maker Nikon opened a factory in Laos last year.

Another major reason that manufacturers are making sure that they have a presence in the area is to be able to serve the ASEAN Economic Community (AEC), which comes into effect in 2015 and will consists of 600 million people from Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.

About the Author

Adrienne Selko | Senior Editor

Focus: Workforce, Talent

Follow Me on Twitter: @ASelkoIW

Bio: Adrienne Selko has written about many topics over the 17 years she has been with the publication and currently focuses on workforce development strategies. Previously Adrienne was in corporate communications at a medical manufacturing company as well as a large regional bank. She is the author of Do I Have to Wear Garlic Around My Neck? which made the Cleveland Plain Dealer's best sellers list. She is also a senior editor at Material Handling & Logistics and EHS Today.

Editorial mission statement: Manufacturing is the enviable position of creating products, processes and policies that solve the world’s problems. When the industry stepped up to manufacture what was necessary to combat the pandemic, it revealed its true nature. My goal is to showcase the sector’s ability to address a broad range of workforce issues including technology, training, diversity & inclusion, with a goal of enticing future generations to join this amazing sector.

Why I find manufacturing interesting: On my first day working for a company that made medical equipment such as MRIs, I toured the plant floor. On every wall was a photo of a person, mostly children. I asked my supervisor why this was the case and he said that the work we do at this company has saved these people’s lives. “We never forget how important our work is and everyone’s contribution to that.” From that moment on I was hooked on manufacturing.

I have talked with many people in this field who have transformed their own career development to assist others. For example, companies are hiring those with disabilities, those previously incarcerated and other talent pools that have been underutilized. I have talked with leaders who have brought out the best in their workforce, as well as employees doing their best work while doing good for the world.