History of Sodick
Part 2: Rapid Growth Phase to Overseas Expansion Phase

Rising Overseas Demand - Construction of the First Overseas Plant in Thailand

Thailand Plant
Thailand Plant
Production line
Production line

Sodick's commitment to developing high-tech products that address the needs of its customers led to a gradual rise in overseas demand.
By 1986, Sodick's product export rate had increased to around 30%.
But at around the same time, Japan was hit by a rapid rise in the value of the yen as a result of the Plaza Accord, with the yen exchange rate going from around 250 yen to the dollar to around 150 yen to the dollar. This was a major blow to Sodick's export growth.

This, coupled with the fact that Sodick's two domestic plants (Fukui and Saga) were unable to keep up with demand, led the company to consider building an offshore production facility. They visited several countries in Asia before settling on Thailand as the most suitable option due to its convenience and its national characteristics. However, there were many in the company who opposed the idea due to concerns over parts procurement and the maintenance of product quality.
But Sodick founder Toshihiko Furukawa decided that establishing an offshore mass-production system was the best way to address the company's needs for future growth and to fulfill his vision for how the company should progress, and so the plans for a plant in Thailand went ahead.

Sodick (Thailand) Co., Ltd was established in November 1988 as a 50/50 joint venture with Japan ASEAN Investment Co., Ltd. (currently Japan Asia Investment Co., Ltd.). Two years later in July 1990, the Thailand Plant was completed as Sodick's first overseas production facility. The new plant was furnished with equipment to allow almost all the components to be manufactured as they would be by Sodick in Japan, including the most advanced automation and integrated production facilities equivalent to those used in Japan.

Thanks to the single-minded and consistent hard work of its employees, the Thailand Plant grew to become a robust production facility capable of taking on everything from designing new EDMs through to final production. Within 15 years of being established, the plant was employing more than 1,000 workers. In 2011, the plant was inundated by floodwaters but was fully restored afterwards. And in February 2013, a second plant was built a few kilometers away on higher ground.
The Thailand Plant is now Sodick's main production facility, accounting for around 40% of sales with monthly production in the order of 200 units (as of 2015).

Interview with Sodick Chairman and Founder, Toshihiko Furukawa Phase of Thailand

Given the impacts of the rapidly rising yen after the Plaza Accord in 1985, you started thinking about setting up factories offshore. Tell us what was behind your decision to proceed with overseas expansion in Thailand.
Furukawa It was because we could no longer make products in Japan.
First of all, we didn't have enough staff. We were also short of raw materials. The fact is, the Fukui Plant and the Kaga Plant were in full operation.
At the time, I thought that the biggest factor was probably the lack of staff.
So really, the only way to further increase production was to go offshore. But then the question was where? We spent ages trekking round various countries, but in the end we thought Thailand was the best option after all. Many said it was not a good idea, but the thing is, Thai people are really nice.
After the Thailand Plant was flooded in 2011,
how did you come to decide to build a second factory?
タイ第二工場 Furukawa Well, we had around 1,500 employees at the time. And when you add in the subcontracting companies, there were about 2,000 people who were going to lose their jobs. Therefore we simply couldn't close the plant just because there was some flood damage. So we refurbished the flood-damaged plant, and then the following year we built the second plant in a higher and slightly better location. That has enabled us to further increase
our production capacity to today's level.
And what are your thoughts now about the Thailand plants?
タイ Furukawa I think Thailand is great.
In fact, it's our users that say they think it's great. This is because Thailand is an easy country to visit -- from Europe, from U.S., or from anywhere in the world. If you're coming from Europe, it's just on about 10 hours. It's extremely easy to visit; you don't need a visa.
You can just decide you want to go, and then go right away. So for things like training on a machine, you can be there within a day. It's much easier for everyone to get to than Japan.
It also has the advantages that everyone works really hard and there is not much to worry about terrorism.
For manufacturing, there really isn't anywhere better. So, I don't see the need to manufacture anywhere else.