Daikin to build reefers in China

Production in Suzhou is scheduled to begin in October 2008, with an output capacity of 40,000 units targeted for 2010. The global container refrigeration market continues to expand, and demand in fiscal 2007 will be approximately 100,000 units, according to the company’s calculations. Daikin is the second largest supplier of reefers to the global container industry, and the company’s current Japanese production base at Rinkai Plant in Sakai City, Osaka, has an annual manufacturing capacity of 30,000 units.

However, growing demand, plus expanded sales efforts, have created a need for additional capacity. As units are exported to China, where demand is concentrated, the ability to shorten lead-time from production in Japan to delivery in China has also reached its limits. The decision to establish the new company in China was made as part of Daikin’s ‘Fusion 10’ strategic management plan, which aims to make the company a global air-conditioning and refrigeration manufacturer by 2010.

Production will be transferred gradually to the new Chinese company, with the combined annual production of both bases slated to reach 70,000 units by fiscal 2010. All main parts will be internally produced, shortening lead-time from production to product completion from 17 to nine days. Additionally, Daikin says that distribution lead-time to deliver units to container box manufacturers can also be reduced from 10 to four days.