Yonezawa Electric Wire to Expand Wire Output by 10%

Yamagata based Yonezawa Electric Wire Company, which belongs to Fujikura Group, expands the output capacity of electric wire and automotive wiring harness by around 10% through the restructuring of the production system for better efficiency. The firm shifts electric wire output facilities from the headquarters to Koriyama plant in Fukushima in August and transfers automotive electric wire output facilities from the headquarters to Hachimanpara plant in Yonezawa in September. The firm will improve the production efficiency in Asian operations trying to improve the supply ability to meet growing demand through the production sites in Japan, China, Thailand and Vietnam. The automotive wiring harness represents more than half of total sales for the firm. The firm tried to increase the output in the operations including domestic partners and processors to meet rapid growing demand in fiscal 2005 ended March 2006. The firm decided the expansion when the firm expects the demand could increase more after the demand kept growing in April-June. The firm consolidates the operation to specific plants to optimize the output. The firm expends 900 million yen for domestic wiring harness operations in fiscal 2006 to expand the sales for Japanese major automakers. The firm will keep annual 700 million yen of capital expenditure for years. The firm tries to establish best Asian production system in manpower, freight and procurement of materials between Fujikura Zhuhai in China, Yoneden Thailand and original equipment manufacturing partner in Vietnam. The firm will reduce the total cost including freight and inventory by improving management system between Japan and offshore operations. The firm tries to expand the offshore output weight from current over 60% of total output targeting 25% each in Japan, China, Thailand and Vietnam.