December 18, 2007 -- TOKYO (Nikkei)-- Makino Milling Machine Co. (6135), a leading maker of machine tools, is reorganizing the operations of its subsidiary in China.

Makino China Co. is based in Kunshan, Jiangsu Province. Up until now, the head office has managed all five sales offices and all three technical centers nationwide in addition to the factory in Kunshan that makes arc-discharge machining tools. Henceforth, the Chinese market will be divided into four regions -- east, west, south and north -- and a general manager will be stationed in Kunshan, Chongqing, Dongguan and Tianjin to be in charge of each region.

The regions vary in industries and cultures, so by dividing the market in this way, Makino hopes to better meet customer needs.

Makino's sales in China totaled roughly 17 billion yen in fiscal 2006, up 35% from fiscal 2004 and quintuple the sales of fiscal 2002. Makino China's workforce has grown seven-fold since fiscal 2002 and now stands at around 280 employees.

The machine tools Makino sells in China are mostly imported from Japan and Singapore. But while the company's overall Asian sales for the half year to September grew year-on-year, its operating profit decreased by half. One problem was defective products made in Singapore, but the main cause was the failure by Makino China to provide timely customer service. The reorganization is designed to fix this problem.

(The Nikkei Business Daily Tuesday edition)

Source: Nikkei Report