Hoya Vision Care's recovery from the floods in Thailand is coming along faster than expected. The Japanese company had said a few days ago that it was expecting to resume operations yesterday at its production facility in Pathumthani near Bangkok, which have been stopped last Nov. 2. It also indicated that it should be able to clear the water out of its damaged higher-end factory in Ayutthaya by the end of this month, but a European executive of the company said the plant became dry already this past weekend.
Hoya's plant in Pathumthani makes semi-finished and stock lenses for the mass market Europe and the U.S. The company shut it down on Oct. 21 as a precautionary measure, but the building itself was not directly flooded. The water level in front of the building has gone down to the extent that employees can now return to work safely.
The facility in Ayutthaya, which makes Hoya's higher-end custom-made lenses, was shut down because of the floods earlier last month, on Oct. 12, along with those of other companies in the same industry park. Workers at the park have been pumping water out of the buildings; while the water level in the streets was reported last week to be still nearly 2 meters deep, the water-pumping reduced the level inside the premises in the last few days to just 30 centimeters, but all the inside water is apparently gone by now, one week ahead of schedule. Once the water is cleared out, the company said; the plant's infrastructure and equipment would be evaluated, allowing the necessary reconstruction work to get under way by the beginning of 2012.
In the past few years, Hoya has amalgamated its production of free-form lenses at four factories into the plant in Ayutthaya, so that 90 percent of these lenses have been coming from Thailand lately. Therefore, the group's management has warned financial analysts that the impact from the flooding will be significant, but the company has corrected it in large part by reversing the work flow.
To make up for the disruption at its Thai prescription factories, Hoya has ramped up production at its facilities in Europe. The 11 Hoya Rx labs in the region are operating 24 hours a day, seven days a week, and new supply routes are up and running. Hoya has invested in new machinery and more staff, and optimized its processes, so that in the coming months the production capacity in Europe can be expanded even more and the product ranges can be made more widely available. Martin Batho, managing director of Hoya UK, told Optician magazine that more than €20 million worth of new equipment was being installed throughout Europe.
The situation looks much better than at the end of October, when Hiroshi Suzuki, president and chief executive of the group, told analysts that Hoya could only make up about 10 to 15 percent of the lost production of custom-made lenses, which represent a high share of sales by value, and that some customers will not return to the company soon, even after its plant resumes production. Suzuki was apparently referring to the company's situation in Japan, however, while the situation in Europe is different.
Hoya expects the availability of its prescription products to be up to 90 percent in Europe by the end of the year. Production of Hoya's 1.67 products and TrueForm lenses has moved back to the U.K. in the wake of the Thai flooding, while Germany is seeing the manufacture of Hoyalux iD MyStyle and iD Lifestyle products.
The company's U.S. operations have also been producing lenses at nearly full capacity, with extended production hours. Hoya and its vendor partners in the U.S. are making substitute products available until all the production and the supply chain are back to normal. Hoya North America has also invested in new free-form equipment and software, helping all regional labs to increase capacity and ramp up production of iD Lifestyle and Shamir free-form lens products.
Meanwhile, an official of Thai Optical Group tells us that the company's RX services have been partially resumed and predicts that they will go back to normal by the third week of December. He says that its casting facilities will start operating normally again by the end of the year, after re-checking them and making a test run before the end of this month. Deliveries to all customers should gradually improve as of December, the Thai Optical official added.
At the moment, the big Bang Bua Thong - Suphan Buri road in front of Thai Optical's factory near Bangkok is still partly blocked by the water, with 20-30 centimeters of water surrounding the plant but two lanes have been freed up, allowing transportation to the factory to be partially resumed. With some difficulties, the labor forces are able to get to the factory with their small cars, but all the roads in the area should become accessible again by the end of November.
Hoya and Thai Optical are not the only companies that has been affected by the unprecedented flooding in Thailand. PPG Industries said a few days ago that the waters hurt its optical operations in Thailand as well, forcing the company to decline “force majeure,” suspending production at its facilities that make Solarlens products in Bang Pa-In and Lat Krabang.
The company's Transitions Optical facility in Chon Buri is still operational, but it is feeling the adverse effects of the flooding on many of its customers and suppliers throughout the country. PPG said it could not provide a timetable for full resumption of its own activities.