Kawata Machinery Manufacturing (Shanghai) Co., Ltd., a Japanese-owned auxiliary equipment manufacturer in China, is now entering the US market.
Senior executives of the company spent nearly a month in North America in November last year and concluded that due to the demand of the American market for the integrated systems and automation equipment manufactured by the company, it is now a good time for Kawada to enter the US market.
General manager Wang Ruixiang acknowledged that he was concerned about the possibility of potential trade war between China and the United States undermining the company's plan, and he believed that this situation was out of reach.
He said that President Trump had announced his tariff plan in early April, including a 25% tariff on plastic equipment made in China, which surprised him.
But this did not jeopardize his determination. He said in an interview at Chinaplas Chinaplas in late April. In the long run, he believes that entering the US market is beneficial to both countries.
He said: 'I am considering this issue from the perspective of global economic structure. I believe that the United States definitely needs to develop their own manufacturing industry.'
He said: 'The United States has always wanted to be the leader of the world, so they will spend so much money on military infrastructure. But when looking at the US market, I saw that the bridges and roads are very old. Their machines are also very old. The. '
He thinks that the time to enter the U.S. market to support U.S. industry is ripe.
Wang Ruixiang said: 'I think the United States needs another industrial revolution. The United States cannot rely solely on imported goods.'
To this end, he said that in the long run, companies can set up production bases in the United States.
He said: 'We can even do production and R&D there, because we can't just rely on exports. If we can make full use of local labor and resources, then in the future we will be able to take root in the United States.'
But he said that to do this, it needs a suitable partner.
He said: 'We are looking for partners with market capabilities, assembly capabilities, services and technical capabilities.'
He said that although he does not think that Kawada's machines can achieve 100% 'Made in America', he does find ways to benefit the company and provide jobs.
He said: 'The final assembly of parts can be completed in the United States, but the main manufacturing will continue to be carried out in China. We may become more mechanized. This way we only need one worker to operate several machines.'
Kawada Shanghai is part of Japan's Kawata Mfg. Co. Ltd., headquartered in Osaka, Japan, and established a manufacturing plant in Shanghai in 1997.
The company also has factories in Japan and Indonesia. Wang Ruixiang said that he believes that the company is now very suitable for the US market, given its combination of manufacturing and R&D capabilities.
He said: 'Our products combine Japanese technology with Chinese manufacturing and development. We can combine Chinese strategy with global strategy.'
He said: 'We need to think more profoundly, look at the world. In addition to Southeast Asia, our main target markets are North and South America, including Brazil, Mexico, the United States and Canada.'
He said he believes the company has more advantages than American companies.
He said: 'There are similar US companies, but I think we are more advanced.'
He said that despite this, the threat of levying a 25% U.S. tariff on equipment and parts will have a certain impact on Kawada’s development in the U.S. market.
He said: 'This is not a good thing for the United States, because U.S. companies have not yet solved the problem of technological upgrading. They can't just continue to produce old machines that have already been eliminated by others. They need to accelerate their development to reach the global level.'
Wang Ruixiang stated that Kawada’s road to the US market has been laid for several years. In 2017, Kawada Corporation established a local office in Mexico to sell products from Kawada Shanghai.
He said: 'We have a logistics center in Mexico, a huge warehouse and a service team. We have staff from Japan, China and Mexico.'
He said: 'We are considering doing the same layout in the United States and finding service partners. We can train them and let them know about Japanese technology and Chinese production.'
But first, he said that it needs to increase its brand awareness in the United States.
Wang Ruixiang said: 'In order to enter the US market, first of all we need to do a lot of marketing and promotion. Second, we need to train our agents, and so on.'
He said that despite preparations for the final implementation of the tariff, he still hopes to have alternative plans.
He said: 'I have confidence. I think this situation is just a political game between China and the United States.'