Orange County Plastics Firm to Build Tijuana Plant

Kyowa American Corp., the American subsidiary of a Tokyo-based firm that makes plastic cabinets for television sets, is the latest among an increasing number of Japanese companies to decide to manufacture at a Tijuana maquiladora.

Kyowa American, based in Costa Mesa, has purchased an 8-acre tract in the Tecolotes section in Tijuana, administrator Terry Nagura confirmed in a telephone interview. Kyowa’s plans call for construction to start on a 100,000-square-foot building in April and for manufacturing to begin by November.

Maquiladoras are foreign-operated plants where goods destined mainly for the U. S. market are manufactured or assembled with low-cost Mexican labor.

“Labor costs in Mexico are one-tenth of what they are in America,” Nagura said when asked the reasons for the move. Kyowa, however, will not lay off any of its 400 employees at two plants in Irvine and Costa Mesa once the Tijuana plant opens, she said. Instead, Kyowa will expand the line of products made in its Orange County plants.

Kyowa American, a unit of Kyowa Electric & Chemical, is an injection-mold plastics manufacturer whose clients include Sony, Hitachi and Mitsubishi television manufacturers.

To supply its Japanese TV manufacturer customers in the United States, Kyowa has had operations here since 1973. Kyowa transferred its plant to Irvine from Atlanta in 1978, then opened another plant in Costa Mesa in 1986, Nagura said.

Once the Tijuana plant is operating, Kyowa plans to begin making additional, smaller plastics products at its Orange County plants, including parts for typewriters, facsimile machines and household appliances, Nagura said.