Changes are on tap for Toyoda Gosei

PLYMOUTH, Mich.—Toyoda Gosei Co. Ltd. is expanding in the U.S., and changing at the top.

The firm will merge its two facilities in Brighton, Mich., and Howell, Mich., into one larger facility in Brighton. Toyoda Gosei dedicated the new plant on May 12, which already consists of the Brighton business.

Consolidation of production equipment from the two plants will be complete by 2017. The new facility has a floor area of about 1.5 times the two previous plants combined, the company said.

The firm said it will add at least 36 jobs, bringing total employment to 400. Toyoda Gosei invested about $11 million in the expansion.

Toyoda Gosei produces plastic fuel tubes from nylon at the facility.

“We acquired this company in 2000, and at the time the turnover was only $6 million, but last year we achieved $96 million in turnover, so it is growing very fast,” Toyoda Gosei President Tadashi Arashima said at the firm's technical center in Plymouth. “We will try to expand this business further in the future, so we needed a bigger facility. We hope to see steady growth of our plastic fuel tubes business.”

Arashima will be promoted to chairman of the board at the firm's June board of directors meeting with Naoki Miyazaki taking over the president's duties. Masayoshi Ichikawa was promoted to executive vice president and representative director.

Arashima said the day-to-day responsibility for the firm will fall under Miyazaki's jurisdiction as president. Arashima will oversee the entire operation and chair the board meetings in addition to representing Toyoda Gosei in its various automotive industry related associations.

“The company is involved with many automotive parts supplier associations, rubber industry associations and Toyota Group meetings,” Arashima said. “The chairman spends time in these areas. For the past year, I didn't have a chairman, so I had to do both things. It was quite a burden.”

He said the firm continues to grow in North America, with sales increasing about 20 percent to about $1.58 billion for fiscal 2015. The executive said the company is positioning itself for future market growth by making further investments in the region, with forecasts projecting light vehicle production to reach 17.5 million units in 2015 and continued growth expected in the coming years.

In 2014, the firm said it wants to grow its North American sales to $1.8 billion by 2018.

Toyoda Gosei just opened a production facility in Matamoros City, Mexico, to produce rubber hoses. The company has a second plant in Irapuato, Mexico, for radiator grilles, console boxes and plastic parts set for an April 2016 opening. Once that opens, the firm will have localized production of all four of its core product lines in Mexico—which consist of automotive sealing products, functional components, interior and exterior parts, and safety system products.

Mexico is receiving a lot of investments from automotive manufacturers, but the recent announcement that Toyoda Motor Corp.—Toyoda Gosei's largest customer—will relocate Corolla production from Canada to a new $1 billion production facility in Guanajuato, Mexico, set to begin production in 2019, pleased Arashima.

“North America is the most important market for us, and we don't want to miss any opportunity,” Arashima said. “We are investing in North America to meet the customer's requirements and not missing any opportunities.”

In Europe, the firm nearly doubled its sales compared to fiscal 2014, reporting $347 million for fiscal 2015. Arashima attributed this growth to its 2014 acquisition of Meteor Gummiwerke K.H. Badje GmbH & Co. K.G., which brought Toyoda Gosei's key relationships with prominent German automotive manufacturers BMW A.G. and Volkswagen Group's Audi A.G. unit.

In the Asia-Pacific region, sales decreased by about 10.1 percent to about $1.37 billion, but that didn't stop the firm from investing about $2.9 million to relocate its regional headquarters and technical center to a larger building in the Shanghai region. The company said the new building has about four times as much floor space as the previous one and includes a test area.

Toyoda Gosei said the move has made it possible for it to establish an experimental area and test facilities to assess products and materials fully in China.

“Toyota and other customers built in R&D centers in the Shanghai areas, so we needed to respond to their request to have some R&D capabilities shift from Japan to the local market,” Arashima said.