Tuesday, May 22, 2012

No. 518: Japanese high-tech companies increase their presence in Saudi Arabia rapidly (May 22, 2012)

Business trend
Saudi Arabia is hastily diversifying its industrial structure to avoid overdependence on oil, and Japanese companies began operation one after another for local production. J-Power Systems, jointly founded by Hitachi Cable and Sumitomo Electric, will start to manufacture composite undersea cables that combine copper wire and optical fiber coming August. They can be used not only for electric transmission but also for communications. The company plans to manufacture 160 km annually to achieve sales of about 240 billion yen in 2013. Toyobo and Itochu started to operate the local plant to produce reverse osmosis membrane used for seawater desalination in alliance with a local company. They plan to get sales of 4 billion yen in three years.

Isuzu Motors is scheduled to start constructing a plant to build up medium-size trucks in Damman toward mid-December. The investment is 9 billion yen. The initial production is 600 units annually, and it will increase to 25,000 units annually in incremental steps. Mitsubishi Rayon plans to produce carbon fiber and Azbil wishes to produce valves for petrochemical plants locally. Asahi Kasei considers producing raw materials of high-performance resins locally. LG Electronics of Korea constructed a production base of air-conditioners, and Dow Chemical of the U.S. decided to construct the world largest petrochemical plant in Saudi Arabia, and Japanese high-tech companies follow them. 

Riyadh, the capital of Saudi Arabia

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