Interview to Customer in Starting up Phase “Fact of Starting up in Thailand & Techno-Park’s Support”

We made an interview to Mr. Masakazu Noguchi, who is a president of Showa Industries (Thailand) Co., Ltd. The company is now starting up of their business in Thailand. (Interview date: 27th of September, 2018)

Mr. Noguchi, Mr. Mutsuga
(Left) Mr. Masakazu Noguchi, President of Showa Industries (Thailand) Co., Ltd.
(Right) Mr. Hitoshi Mutsuga, President of TT Techno-Park

Mutsuga:
We deeply appreciate your participating our interview today.

Noguchi:
Thank you for having me.

Mutsuga:
At first would you please introduce your company’s business to audience of our website?

Noguchi:
Our main business is production and sales of base cloth edge for audio speaker. We also process abrasive cloth and reinforcing material for vehicle tire. So our main customer is audio equipment makers. Our core technology is coating processing for
fiber (base cloth), and the coating processed clothes are utilized in variety of industries not only base cloth edge for audio speaker. Our head office (Showa Industries Inc.) is located in Souka city, Saitama prefecture in Japan, and we also have subsidiaries is Dongguan, China and Hong Kong.
Website of Showa Industries Inc.: http://www.showa-kogyo.co.jp/

Mr. Noguchi

Mutsuga:
By what kind of trigger you have started to consider business expansion in South East Asia and in what kind of situation you have met “Techno-Park” business of Toyota Tsusho?

Noguchi:
As I explained, we have been manufacturing base edge for audio speaker in China. But our customers in China, audio equipment makers, have started to move production sites to South East Asia (Indonesia, Vietnam, Myanmar, Malaysia, and Thailand) as a movement of risk hedge called “China Plus One”. Therefore we have started to consider business expansion into South East Asia to adjust the change of global business environment.

I visited South Easter Asian countries such as Myanmar and Vietnam by myself to investigate the market. But after General Manager of our Chinese subsidiary got sick, I had to focus on management of the subsidiary. In such situation, I joined “Orientation Meeting of Industrial Estates for Japanese Companies” by JETRO in February in 2017. On that meeting I met staffs of Toyota Tsusho “Techno-Park” business. After the meeting they set up meeting for me with TT Techno-Park and Toyota Tsusho group in Thailand.

Mutsuga:
Wold you please explain the situation you have chosen Thailand as your “China Plus One” country?

Noguchi:
I visited and analyzed Southeast Asian countries by myself, and judged that Thailand has the most business reality. One of the most important points is the geographical condition. Thailand is located in the center of Southeast Asia including Myanmar and Vietnam. Various infrastructures are already developed, and the economic policy of the Thai government about the Eastern Economic Corridor (EEC) is also favorable.

Mutsuga:
Would you please tell us the reason why you decided the Industrial Estate as company-A?

Mr. Mutsuga

Noguchi:
Finally I chose two major Industrial Estate companies. I decided Company-A by comprehensive analysis about factors that directly affect our production process, such as piping situation of gas pipe (joint development with gas company) and appropriateness of the size of the factory site and budget.

Mutsuga:
Would you please tell us the reason why you decided the construction company as company-B?

Noguchi:
I had compared three Japanese construction companies, and I chose two among them on the way. Finally I decided to company-B in consideration of various conditions comprehensively, such as past transaction performance with main bank in Japan and past factory construction of our main customer’s factory.

Outside of factory
(Construction of the factory is proceeding smoothly, the construction progress rate at the end of September 2018 is about 80%.)

Inside of factory
(Above is the situation of construction inside factory.)

Mutsuga:
Would you please tell us the reason why you decided administration and accounting outsourcing provider as us (TT Techno-Park)?

Noguchi:
While I want to organize a compact back office, I have learned that legal requirements for the establishment of “Accounting Record Officer (*)” in Thailand. Therefore, accounting and administration outsourcing is an important factor for expansion in Thailand, I decided to choose TT Techno-Park by comparing with other accounting firm in Bangkok. When we ask registration process, the general affairs and accounting work in the business starting up phase, it is difficult to confirm “mobility” and ”flexibility” only with quotation document. Since I have no enough knowledge and experience in Thailand and it is difficult to proceed even trivial things, I actually talked face to face and confirmed whether TT Techno-Park is a reliable partner.

In addition, TT Techno-Park is headquartered in WHA Eastern Seaboard Industrial Park. The fact that there is an office in the eastern area (Chonburi and Rayong, “EEC” zone) is extremely critical factor for us to ask support of starting up business in Thailand. Actually after I started several work for starting up, I realize that it is too difficult for service provider who has only Bangkok office to widely support starting up in the eastern area.

(* According to “Accounting Act” in 2000 in Thailand, in all Thai companies, “Accounting Record Officer (in practice it is called “CPD” of qualification name)” must be set in addition to “Accounting Record Managers (signatory owner responsible for corporate accounting)”. In case of a BOI approved company, CPD has conditions such as completion of accounting major at the 4 year university or higher.)

Mutsuga:
Thank you for evaluating the merit of TT Techno-Park. For companies in accounting firm or outsourcing service provider like us, customer will appreciate it if the service exceeds client expectations, but distrust it if the service is a little less than expected. The factors to creates such a small difference are “Integrity” that is a stance to keep on provide higher value and exceed client expectation as a trusted partner, and also organizational ability like Toyota Tsusho “Techno-Park” business.

Noguchi:
We will start recruiting Thai workers soon. What is the point to successful communication with Thai workers?

Mutsuga:
It is labor management that our other customers also have the hardest task.
As you know, in Thailand and Japan there are many differences both individuals and society. For mutual understanding, it is important to pause a moment even when it is hard to understand Thai people’s behavior. In addition, we regularly hold meeting with representatives of our customers to share market trends etc.. That meeting is also a place of exchange of opinions such as labor management and daily troubles. So please utilize the meeting by all means.

Mutsuga:
Would you please tell us your next steps?

Noguchi:
Construction of factory building is smoothly proceeding. Within this year, we will carry in the main manufacturing machine, and then hire employees and encourage education. We are planning to start operation next year.

Mutsuga:
From now on, your preparations for the start of operation will be full-fledged. We sincerely pray for your success of the Thai business. We will continue to support you.
We really thank you for participating in today’s interview.

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