OSAKA -- Japanese medical device producer Nipro will spend $300 million on a new factory in Vietnam, increasing capacity to meet rising domestic and foreign demand for dialysis.
The Osaka-based company said Monday that it will establish subsidiary Nipro Vietnam in Ho Chi Minh City's Saigon Hi-Tech Park this month. Within three years, it will build the factory and install production equipment for around $190 million. Output is to begin in October 2018. Plans call for investing another $110 million or so through 2025 in additional capacity at the plant.
The factory will make catheters, blood tubing and other products for dialysis for sale mainly in Japan and to a lesser extent Southeast Asia. Nipro has relied on a Thai subsidiary to produce for these markets but has now decided to increase capacity as the need for dialysis treatment keeps growing. Low labor costs played a part in the decision to invest in neighboring Vietnam.
Nipro ranks second globally in dialyzers, which filter the blood of patients with kidney disease, often a result of diabetes. The Vietnamese factory will make other dialysis-related products.
The company did not disclose the size of the planned capacity increase but did say the Vietnamese unit will aim for sales of around 9 billion yen ($79 million) in fiscal 2025.