TOKYO -- Japanese machine tool maker Makino Milling Machine has been cashing in handsomely on the lucrative Chinese market, but it is not resting on its laurels. It is preparing to aggressively expand its sales and services into other emerging Asian markets, seeing the region as poised for growth over the medium to long term.
Makino plans to open new "technical centers" in India and Vietnam in 2018, and has already relocated and expanded its center in Thailand. It plans to double capacity at its Singapore plant as early as 2018. It counts specifically on demand for its products from the automobile, smartphone and mold-related industries.
Makino currently has 11 technical centers in China and elsewhere in Asia outside of Japan.
The technical centers serve as showrooms for Makino's core products, such as machining centers -- milling machines with mechanized features such as automatic tool changers and control systems -- and electrical discharge machines, which create specific shapes by using electrical discharges.
At the centers, employees operate the company's products in the presence of customers, and respond to queries about processing methods and how to achieve the desired shapes of certain products.
Makino introduced the centers to enhance sales by strengthening customer support, both before and after sales. It aims to win new customers, especially Japanese, U.S. and European companies operating in markets such as India and Vietnam.
In the first half of the current fiscal year starting in April, Makino won machine tool orders worth 97.6 billion yen ($871 million), up 31% from the same period in 2016, and a new record for the fiscal first half.
Of that amount, just over 30%, or 30.1 billion yen, came from Asia outside Japan, including China.
"Demand is robust in China with smartphones shifting to models with higher functions and improvements in quality," said Makino President Shinichi Inoue. "Strong sales will continue, at least in the second half of the current fiscal year, and the first half of the next fiscal year," he said.
According to the Japan Machine Tool Builders' Association, the total value of machine tool orders received by Japanese manufacturers surged 49.8% in October from a year earlier. It was the 11th consecutive month of year-on-year gains.
Makino plans to complete a new technical center in Chennai, India, between February and March 2018, and another in Ho Chi Minh City, Vietnam, in July 2018. The Chennai center will have about 3,800 sq. meters of floor space and around 30 employees. The Ho Chi Minh City center will have about 4,700 sq. meters of floor space and 20 employees.
Makino plans to invest around 300 million yen in the Chennai center, and 200 million yen in the Ho Chi Minh City center. The company already has sales offices in both cities.