Shimano invests S$245 million to build S'pore plant to make more bicycle parts

Everyone is cycling.

Belmont Lay | July 12, 2021, 06:09 PM

Japanese bicycle parts maker Shimano is investing S$245 million to build a new plant in Singapore, Nikkei Asia reported.

The decision comes as the company's existing Singapore factory, which was built in 1973, deteriorates.

The bulk of the funds is being invested in the Jurong Innovation District, where the existing plant is located.

The new plant will produce parts such as transmissions for high-end bicycles.

Demand soaring

Demand for bicycles and related products is skyrocketing globally due to the coronavirus pandemic.

Shimano is facing a shortage in production capacity owing to its high global share in bicycle transmissions and other components.

Cycling is viewed a healthy habit to cultivate, as well as as an acceptable alternative to travelling overseas, which has been curtailed.

People are taking it up recreationally, as well as making it a mode of transportation owing to its low risk of Covid-19 transmission.

As a result, the Japanese company is making money.

It generated 63 billion yen (S$773 million) of net income in fiscal 2020, up 22.5 per cent from the previous year.

For fiscal 2021, Shimano forecasts its net income will grow by 25.4 per cent to 79 billion yen (S$970 million).

End-2022 opening

The new Shimano plant is scheduled to come online by the end of 2022.

It was meant to have been completed by 2020 but a reduction in the large number of construction workers to curb the spread of the virus caused a delay.

Shimano also decided to invest another 13 billion yen (S$160 million) in its two domestic factories in Osaka and Yamaguchi to expand production capacity.

With the two domestic plants increasing production, Shimano says "this year the total production will be 1.5 times more compared to that of 2019".

Shimano recently appointed a new president, Taizo Shimano.

As of fiscal 2020, bicycle parts sales account for about 80 per cent of Shimano's total sales.

Fishing equipment made up about one-fifth of its sales.

All photos via Shimano Facebook