TOKYO – Kaga Electronics will build a new factory in Mexico to meet customers' growing needs in the US market.

In a release announcing the new construction, Kaga said the purchase of land and construction of the new facility is expected to total around 5 billion yen ($34.2 million) over the next five years. The new facility, which will be built in the Parque Industrial Millennium in San Luis Potosí, will feature 20,000 sq. m. of floor space and when in full operation, the company anticipates a need for 700 employees. Construction is planned to be completed in April 2024.

Taxan Mexico, the company's EMS subsidiary in Mexico, was established in 2017, and has primarily focused on the assembly of lighting units used in vehicles in the US market. After seeing an increase in orders from those existing customers and expecting to gain new customers requiring the assembly of circuit boards to be used in air conditioning equipment, Kaga saw the need to expand beyond its existing 8,200 sq. m. Mexican facility, the company said.

In addition to unit assembly and circuit board assembly, Kaga plans to make the new factory into an integrated production base that includes component molding, sheet metal processing, and finished product assembly. The company said its aim is to capture local production demand for products intended for the US market, where opportunities are expected to increase in the future, and turn the Mexican operation into Kaga's largest EMS business base, with net sales of 50 billion yen ($342.1 million) and approximately 2,000 jobs to be created within five years from the start of operation.

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