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Taiwan auto parts firm leads way in Okinawa business push

The Okinawa Times

The Taiwanese boss of an auto component-maker in the Okinawan city of Uruma is confident that his decision to come to the island prefecture was the right one.

“If you have production bases in Okinawa, your products will be labeled ‘made in Japan’ and become more competitive,” Johnnie Lin, president of Nippon Hishiyama, said last month before a group of some 30 representatives from Taiwanese semiconductor and medical equipment manufactures.

Nippon Hishiyama is the first foreign manufacturer to set up a business in an industrial development zone in Uruma and is attracting the attention of other Taiwanese firms.

“The prefecture is close to Taiwan and has a similar living environment,” Lin said, noting Taiwanese companies were likely to make inroads in the prefecture, where government support is also provided.

Established in March last year, Nippon Hishiyama is a joint-venture between Taiwanese firms Fu Chon Trade Co., also headed by Lin, and auto component-maker BGF, run by his brother.

The company procures components from Taiwan and assembles them into products related to brakes and clutches at a rented factory in the prefecture.

Due to the lack of a precedent, the firm faced unexpected issues, including higher-than-expected costs for machinery equipment investment as well as personnel and distribution expenses.

But it also achieved its main business goal of enhancing competitiveness by manufacturing products in Japan.

The company received orders to produce auto parts for export for a Japanese manufacturer and succeeded in expanding sales in the Middle East, home to many wealthy people who are particular about quality.

“Even if costs rise, we can obtain added value to offset them,” Lin said, adding that if the products are labeled “made in Japan,” it is easier to raise prices. “Coming to Okinawa was the right decision for us, as we could find new customers.”

Lin said government support was also helpful in the initial stages of operating the business, but added he could not count on it forever. “I’d like to get my business on track and let the firm make sense business-wise,” he said.

Lin Ren Yi, who led the group of Taiwanese firms visiting Okinawa, said more Taiwanese companies were likely to follow suit.

“The challenge taken up by Nippon Hishiyama will become a model case for Taiwanese companies wishing to follow,” said Lin, also chairman of the Metal Industries Research and Development Center. “It could be interesting to see a Taiwanese zone inside a factory for lease.”

Lin said he wants to see Taiwanese and local companies develop a relationship in which the two parties can support each other by making use of each of their advantages.

“Collaboration by such companies might lead to the creation of new business,” he said.

The move comes as the Okinawa Prefectural Government has been holding business meetings in Taiwan in recent years to explore the needs of Taiwanese firms looking to start operations in the prefecture.

As a result, the prefecture was able to make clear the benefits it can offer — the good reputation of products labeled “made in Japan,” opportunities to expand the market to other parts of Japan and overseas from Okinawa, distribution infrastructure that ensures stable shipments and government support such as tax breaks.

Various business organizations from the two economies have also signed agreements since last year, helping promote exchanges between companies.

“In addition to regional and historic familiarity, what Taiwanese firms want from Okinawa and the merits Okinawa can offer are becoming clearer and the two parties have started to match their demands,” said Ryota Yoshinaga, director of the prefecture’s Taipei office.

This section features topics and issues from Okinawa covered by The Okinawa Times, a major daily in the prefecture. The original article was published on Feb. 24.