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Nikon to build $6.3m DSLR factory in Laos to lower costs

Mar 21, 2013 at 17:29:59 GMT

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Nikon has said it will spend around ¥600m (around $6.3m) to establish a factory in Laos. The factory will conduct part of the production process for the company's entry- and mid-level DSLRs, with final assembly still taking part in the existing Ayutthaya plant in Thailand. The move aims to increase production capacity and help reduce costs, the company says. The announcement suggests all mass-market Nikons will still pass through Ayutthaya, where all production was halted for several months following a devastating flood in October 2011.

Press Release:

To reinforce digital SLR camera manufacturing organization
Establishment of a new factory in Laos

Nikon Corporation (Makoto Kimura, President) is pleased to announce the establishment of a new factory in the Lao People's Democratic Republic (Laos) to reinforce its digital SLR camera manufacturing organization and reduce costs.
Operations are scheduled to commence in October 2013.

Entry-level and mid-class digital SLR cameras, and some interchangeable lenses are manufactured by Nikon (Thailand) Co., Ltd. In the Ayutthaya province of Thailand. With the establishment of this new factory in Laos, a part of the production for digital SLR cameras which are completed as final products at Nikon (Thailand) will be done in Laos.

Company Overview

Name	Nikon Lao Co., Ltd.
Address	KM 28, Savan-Seno Special Economic Zone, Savannakhet Province, Lao PDR
Capital	LAK 60,000,000,000 (approx. ¥ 600,000,000)
Ownership	Nikon (Thailand) Co., Ltd. (Approximately 99.99%) and other
Representative director	Nobuyuki Muraishi * Part-time service. Also serves as Managing Director of Nikon (Thailand) Co., Ltd.
Site area	Approximately 12,500 m2
Floor space	Approximately 10,000 m2
No. Of employees	Approximately 800 (planned) when operations commence
Start of operations	Scheduled for October 2013
Primary activities	Assembly of digital SLR camera units

OTHER NEWS DSLR NIKON

Comments

Total comments: 75

Will the Laotian workers be paid a fair wage, work under fair terms and conditions and be treated with respect?

Frankly, I don't want $50 off my next camera if someone else has to go through life like a battery hen because of it (assuming Nikon won't simply pocket the difference).

0 upvotes

Why the QC concerns? You always get the best QC possible in the world when the military lets you shoot your bad workers.

0 upvotes

this really is a terrible thing, Laos is a very extremely primitive country , and I do not trust made in Laos quality, I'd much prefer to have made in Thailand cameras over made in Laos toys.
I think I might have to consider boycotting all Nikon products.
I do not want to have some serious camera made in primitive third world country like Laos , Burma or North Korea, it really affects on reliability and QC seriously.

by the way,do not confuse Laos with Thailand , Thailand is a great country and it is definitely much more developed nation than Laos.

3 upvotes

what a primitive comment.

5 upvotes

I am sure you would have banned Iphone since it is made in China, your underwears since it is made in Bangladesh, your clothes since it is made in Pakistani mills...poor thing! You have a long way to go child!

3 upvotes

Calm down guys, I think his comments are on the manufacturing methods, and not on the people there.

1 upvote

what brands are made in North-Korea? I can't think of a single product that comes from there.

0 upvotes

Clearly none of the comentors has ever been to Laos and seen the situation there. If you have a look at the laotian history you will find out that countries like Thailand, Cambodia, Myanmar and even China praise the high quality of the laotian craftsmen.
The reason for Nikon to go to Laos is pretty simple, Laos is the hydroelectric powerhouse of Southeast Asia and exporting large amounts of energy to its neighbors. If you invest directly in Laos you get the energy for free and highly motivated workers which will work as good as US-american workers.
Don't be surprissed to find out that data storage for your cloud solutions will be handled by laotian companies in the future, they have the perfedt climate and free electric power.
Btw. Laotian people still like american tourists even after american bombers destroyed large parts of the country without a declaration of war. I guess the pilots could not find Vietnam on their maps. Hearing racists comments from Americans puts the USA at shame.

2 upvotes

I'm just wondering about quality control. The lower end and midrange DSLR cameras will be made in Laos with final assembly in Thailand. I see potential for many QC issues in new trainees, shipping of cameras from one plant to another, etc. But, Nikon is going into survival mode by keeping costs down. I know no one likes to think of iPhones replacing DSLRs, and we all know that they don't really, but people might be thinking twice about buying a D3000 generation camera when their phone takes "perfectly good shots." I'd prefer to have my camera made in Japan, but my D80 is from Thailand! I wish the new plant well. Just don't want to hear about any more oil spatters and sensor dust in new cameras.

3 upvotes

Thing is, all those cameras with issues are made in Japan. iPhones will not replace dslr's but will one day kill the P&S's.

0 upvotes

maybe with the inexperience of the new trainees, they will fail at learning to make cameras with spatter! ;-)

(but I do think that this is more of a design problem than a manufacturing one)

Comment edited 42 seconds after posting

1 upvote

Who cares! WHAT DOES IT MATTER? No, really! Do we keep track of where every manufacturer has manufacturing plants? With multiple plants in different countries, how does this affect anyone? I can understand there is more reassurance when it says Made in Germany, USA, Japan... but once you're out of there, who cares? It's pretty much all the same.

2 upvotes

Indeed, if they follow the quality standards and that the quality control is strict, I think there is nothing to fear. Personally I am happy with my recent acquired RX100 made in china.
The problem arises over the quality of the materials employed, than the quality of labor. imo.

Comment edited 24 seconds after posting

1 upvote

@Digitall: in china they cut corners on EVERYTHING, not just materials. with the notable exception of companies (like Sony in the case of your RX100) who own the factory, and have control over everything, from sourcing materials and parts, to manufacturing, assembly, quality control. where geographical boundaries do make a difference, is when they define differences in the evolution of the culture of the manufacturing process.

1 upvote

Great laughs....someone has a good sense of humor....happy Friday morning to all.

RE:
By alpha90290 (12 hours ago)
LOL. If they build the factory in Iraq, American will get Nikon camera that will shoot out a shoe and hit their face whenever they press the button.

3 upvotes

why not build it in malaysia?

0 upvotes

Because Malaysia is more expensive than even China, which itself is not as cheap as it used to be.

3 upvotes

Too bad we don't get it in the US. I would (if) give them the land no property taxes little or no state tax for ten years then a low tax rate (fed is another issue and my solution would apply) buiid it where needs are strong workers sign a work for hire agreement (no unions) and then pay them them a wage based on performance and company profit. Make the workers assets and happy. Nikon could pick up the costs of design etc in other areas this is only an assembly plant. More money in the hands of the people will get any economy going. Stop paying big gov and big unions have a market economy instead.

1 upvote

What you're describing is actually happening in some industries. Large appliances manufacturing for instance is largely coming back to the US. Ironically, one of the reasons it's coming back is related to problems with local engineering and design being difficult to manage at a distance.

How cool would it be if we had a Nikon plant here! Heck, there are Toyota and Subaru (among others) plants in the US, why not Nikon?

0 upvotes

Nikguy,, Average cost per worker hour in the US (even with your fanciful reduction in overheads) is going to be at least 10x more than in Laos. Unless Nikon is incapable of remedial math,, it'll never happen.

1 upvote

The difference between Laos and Thailand is Thailand is a multi-party democracy and Laos is a communist state where only one political party is legal.

I wish Nikon would build a factory somewhere like Eastern Europe or Brazil or Mexico or something. Or if they really have to keep it in Asia, how about India or the Philippines?

I'm tired of the products I use propping-up authoritarian regimes. Not to mention exporting industrial waste to places that have fewer restrictions on it. Until their citizens all start dying from it, of course. The Chinese are just starting to get ticked-off about that these days...

2 upvotes

"Thailand is a multi-party democracy"

Huh? The country ruled by military juntas one coup after another where people are thrown in jail for saying anything against a King is a democracy now?

2 upvotes

A multi party democracy? Hah, Thailand's run by a convicted felon on the run in Dubai. Thailand, where illegal ivory trade flourishes and billionaire heirs dont go to jail even when they hit and kill policemen in their Ferraris and test positive for alcohol and cocaine. Give me the peaceful people of Lao who deserve to have a better quality of life over those lazy jokers any day.

0 upvotes

It's not just Laos thats cheap to build in.
In Portugal Leica just opened a 52.000m2 factory for 720 workers.

Price tag €23 mil...
http://leicarumors.com/2013/03/22/leica-camera-ag-opens-new-plant-in-portugal.aspx/#comments

0 upvotes

Leica in Portugal is not new at all, price of labor interesting and highly qualified staff, Leica are there since 1973. ~40 Years.

0 upvotes

Companies are soon going to run out of low-labor-cost countries to build their factories in, however good or bad that might be.

1 upvote

No way, people in many part of the world multiply too fast to ever become expensive. China's 30x rise is per-capita income is thanks to their one child policy allowing them to work on the productivity of each person vs spawning as many as possible, sharing dwindling resources between them.

0 upvotes

That's the point.
They are also starting to realize that they have rights (which is a good thing in the view of a better world).
China's now, who's next?

0 upvotes

Who has one-child policy now to bring results in 30-40 years? Nobody.

0 upvotes

this is just a tactical move to scare the Thais

0 upvotes

Not my thighs, I don't use my cameras like that!

2 upvotes

They had to because of the swarm of enviro nuts pushing their bs globule warming on us.

Back to Laos. You can can train anyone to sit in a production line to assemble parts. Difference between doing it in the West vs East is the stinking UNIONS.

0 upvotes

Unions or not, nobody is going to work below living wage, and living wage in the western countries is higher.

0 upvotes

"Globule" warming? I'll bet your major problem with the concept is your lack of ability to conceptualise...anything.

Surrounded by 'enviro nuts' and 'stinking unionists'? Suicide's probably your best bet. Ciao.

0 upvotes

International trade is the only thing which helps poor developing countries. Quite sad that some here seem to think otherwise or like to make fun of that. Maybe they rather like to pay twenty times the money for a worse quality German hand made camera and then travel to those picturesque countries to photograph starving peasants and feel like a pukka sahib.

6 M$ buys a lot of industrial space in Laos, meanwhile the US government spent 95 M€ just to make a 2500 m2 embassy office building more environmentally friendly here in Helsinki. And I am not kidding.

5 upvotes

I don't know if you guys are all aware. Lao is just a new China province like Tibet.

2 upvotes

HH the Dalai Lama and the Panchen Lama are pure Tibetan though. There's still a ray of hope for Laos.

1 upvote

Except that the real Panchen Lama has disappeared with his whole family, and the Chinese have put their own "chosen one" in his place. As the same thing will happen with Dalai Lama when he passes away he has already said that he fears he will be the end of line.

2 upvotes

that's so right - unfortunately.

0 upvotes

Except that the totalitarian Chinese replaced a priest-tyranny in Tibet. Shining media attentiona aside, this aera is a hellhole.

International trade helps - multis. Drive through Africa - nothing reaches the villages - one indian generic Aspirin tablet is quartered and sold 4x.

As long as more people mean cheaper labor and lowlevel consumers - nothing will change - cull the planets population by 2/3, everybody will have a decent live.

0 upvotes

Ah....Laos.....one of the few remaining sources of naive population that can be had for pennies a day.

Heck maybe Ashton Kutchner will get a raise from all the savings.

Perhaps not.... I'm sure Nikon's still hurting from the clean up costs/ environmental damage they were held accountable for stemming from their brilliant decision to a build a factory with numerous chemical, etc. in the flood prone areas of Thailand.

1 upvote

So can we expect even cheaper lenses and dslr from Nikon ??

1 upvote

$6M? For a camera factory? After I get these darned kids to leave the nest, I'm retiring.

-- Bob

0 upvotes

Nikon is scouting all the low lying flood prone sites. Then they'll put all their costliest equipment on the 1st floor, having learned from the Thailand flood.

2 upvotes

Laos is on higher ground and upstream of the river. Chances of flooding is low. This is a wise move by Nikon to protect its equipment , cut labor cost and increase profit.

0 upvotes

6.3 mil is not much in US but is decent sum in Laos. All they need to build is a environmental controlled building- land will be free or extremely low rent from the Laos governemt, equipment will be shipped from Japan. Good for Nikon and good for Laos economy - they truly need some high tech injection into their economy and the best part is Nikon will help training Laosian workforce.

3 upvotes

An assembly line is not high tech.

0 upvotes

@peevee1 - What? An assembly line is not high tech? What is the last modern electronic assembly line you visited? They're extremely high tech! Nikon no less.

0 upvotes

Compared with growing rice its about as high tech as making the jump to lightspeed.

0 upvotes

Assembly is assembly, there is nothing high in the tech of assembling sht. Electronic engineering is high tech, software engineering is high tech, glueing pieces of plastic together is barely a tech, let alone high.

0 upvotes

You don't know anything little peeing-man.

Where do you get the idea that assembling cameras and lenses is about gluing plastic parts together? There's a ton of mechanical, materials and electronics engineering that goes into all the tooling. Assembly lines are run by manufacturing engineers and utilize state of the art tooling to accomplish their task. Clearly you've never been inside of a place that does this kind of thing or you wouldn't make such statements.

0 upvotes

@stevo 23
Man there will be no production in Laos so what are your refering as high tech is welding electronic parts, gluing (as almous all part are from plastic), screwing plastic part togheter. I highly doubt that lenses will be made there as pro lenses are made in Japan ONLY and the rest are made in Hong Kong, Thailand and Malaysia(maybe not any more).

0 upvotes

Interesting that cheap shots cost so little.

I am sure that the Lao workers will be well trained, conscientious and hard working. They will save hard to supplement their diet with big macs and coca-cola so that they might have a true sense of belonging. I am sure that Nikon will soon enough get a payback for their investment well before they consider reducing prices to their more affluent customers.

If the laughter subsides long enough consider how much hand assembly in Germany might add to the price of an average camera.

If these cameras have a Nikon badge out front people still will bow graciously as they hand over their credit cards to buy them. No doubt re-assured that the Lao assembly process is checked by regular operatives in Thailand.

1 upvote

Hopefully they'll be trained enough to build shutter mechanisms that doesn't splatter excess lubricant onto the sensor.

That's be nice.

3 upvotes

If that were a worker bee issue it would be one thing. I suspect it's a design/engineering problem and as such, shame on Nikon's engineers!

2 upvotes

Only $6.3mil budget?
What will they make? Nikon key-chains?

LOL! Seriously that is refreshing to see. A realistic figure for a change.
They could have easily said $63Mil and nobody reading it would have thought twice about it.

I guess Laos adjusted the kickback going rate to todays low economy... They really must feel the axe of the people to do that... ;-)
j/k

2 upvotes

For that money maybe they are go make there just lens and camera caps, maybe lens hoods, I think the camera straps already contracted to outside vendor.

0 upvotes

They should build the factory in Iraq, for even lower costs and even cheaper oil for their sensors.

7 upvotes

LOL. If they build the factory in Iraq, American will get Nikon camera that will shoot out a shoe and hit their face whenever they press the button.

1 upvote

10 000 square meters of factory floor for 800 employees for 6.3 million dollars (4.9 million euros)? Clearly Laos is the way to go.

3 upvotes

I don't care.

1 upvote

Yay! now we get Laos dust on our sensors as well!

7 upvotes

I hope quality control won't lower, or else we'll have oil on the sensors or bad AF.

Oh, wait...

7 upvotes

That cheap? Hmm, I wonder what QC will come out of such a cheap plant.

1 upvote

Wow. $6.3 million is all it costs to make a camera factory?! That's a normal-sized apartment in some parts of New York.

3 upvotes

No building codes so it will be made out of bamboo and mud. Make sure you get your malaria shots before buying your next Nikon!!

5 upvotes

The world is different elsewhere, but for that sum you'll get a very nice, and huge, villa in the poshest part of Sweden! With guys like Bjorn Borg as neighbors!

1 upvote

Maybe is a typo, most reasonable figure is $63M

0 upvotes

Hey guys they have to make a profit somehow! Every day I am thinking about these poor Japanese guys how much they suffer while I am a spoiled rat using their products...anyway I heard child labour is not so cheap any more...

5 upvotes

I guess they will build anywhere the labor is cheap, the government is corrupt, and the people are repressed enough that they can make a profit. Globalism at its finest.

12 upvotes

Why should the Lao government be more corrupt than any other, say the one in Thailand?! Or Greece, or ...?!

7 upvotes

And, of course, they will fight against "grey market" sales even more vigorously, carry on the spare-part sales ban to third-party repair shops, and maybe even design certain parts to wear out.

3 upvotes

Quite remarkable progress. Peidasdf said it...GDP 2011 was $17.6 Billion and Exports were $2.6 Billion total for 2011...

0 upvotes

I read $6.3 billion and think isn't that the entire worth of Laos. Nikon is buying the country. LOL.

3 upvotes

US$6.3 million (600 million yen).

3 upvotes

Total comments: 75

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Nikon to build $6.3m DSLR factory in Laos to lower costs

To reinforce digital SLR camera manufacturing organization Establishment of a new factory in Laos

Comments

To reinforce digital SLR camera manufacturing organization
Establishment of a new factory in Laos