Bicycle component brand Shimano is investing around 20 billion yen (£131 million) in building a new plant in Singapore following a surge in demand resulting from the coronavirus pandemic, Nikkei Asia has reported. The Japanese company is also investing a further 13 billion yen (£85 million) in expanding the production capacity of domestic factories.
We’ve reported many times that global demand for bikes – and, consequently, components – has vastly increased since the start of the pandemic. Coupled with disruption to the supply chain, this has resulted in shortages in many parts of the world.
Although people often talk about the “big three” groupset manufacturers, Shimano produces far more products than either SRAM or Campagnolo and the bike industry is hugely dependent on supply from the Japanese brand. Many bike manufacturers have reported that lead times have increased massively over recent months as the company struggles to keep up with demand.
> Britain’s bike shortage, part 2: tips for buying the bike you want in 2021
Nikkei Asia reports that Shimano generated 63 billion yen (£413 million) of net income in the 2020 financial year, an increase of 22.5% over 2019. For the 2021 year, Shimano forecasts another increase of 25.4% to 79 billion yen (£518 million).
Newly appointed company president Taizo Shimano told Nikkei Asia that the new plant in Singapore is scheduled to begin production by the end of 2022. It would have been sooner but construction has been delayed by measures taken to curb the spread of the virus.
Shimano is investing a further 13 billion yen (£85) to expand production capacity in domestic factories in Osaka and Yamaguchi. The company aims to improve efficiency through the use of advanced manufacturing equipment and software.
With these two factories increasing production, Shimano says that total output this year will be 1.5 times that of 2019.
Bike components make up about 80% of Shimano’s total sales with fishing equipment accounting for the remainder.
9 thoughts on “An end to the global bike component shortage? Shimano invests £216 million in expanding production”
Is it me or is Shimano
Is it me or is Shimano responsible for 90% of the component slowdown now? Every week I get mails from PlanetX with bikes dripping with 1x SRAM stuff with 5-10 days delivery. It feels like SRAM and all the bulk Far East frame manufacturers have sorted themselves out. So getting a decent bike has gotten easier over the last 6 months – albeit getting a specific bike is still too hard.
In defence of Shimano – They
In defence of Shimano – They actually make a lot of stuff. Secondly they have been hit pretty hard by the pandemic to the point where they want to cancel or pospone hosting the olympics but the IOC being the selfish twats they are dont care about what Japan wants.
Shimano has factories dotted all around South and Southeast Asia and they also have been heavily effected by the pandemic.
Thats not to say that the USA (SRAM) hasnt been hit hard by the pandemic but maybe its just easier to get parts in from the USA then Asia due to logistics as the UK is more direct via sea and air to get to thus a quicker and more efficient process.
If you take into account that a lot of stuff is made in China and Japan and that bicycle retailers having difficulties meeting demand. That pretty much answers your question.
The Shimano option is very popular. but production is either slowed or they have issues exporting the goods out.
Pretty sure most SRAM
Pretty sure most SRAM components are made in Taiwan, so same shipping conditions apply. Ironically they closed their Chinese factory several years ago due to the slowdown in global demand for bike parts…
Would have thought in Shimano’s defence they supply an awful lot more. Just look at the domination in the Pro tour teams alone.
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Glad to see the pound has recovered.
Not sure I can wait two years
Not sure I can wait two years for them to get fully up to speed, flood the market and reduce prices to more realistic levels.
I was under the impression
I was under the impression they made this investment around 2 years ago but the process has been delayed because of construction workers in Singapore not being able to work because of COVID.
Also, although a lot of things are easing around China and Taiwan, Singapore still has very tight COVID restrictions which is why Shimano could still be struggling in getting back up to full production
needs it, I’m told a warranty
needs it, I’m told a warranty replacement for my ultegra Di2 mech won’t arrive until november.
“Shimano is investing a
“Shimano is investing a further 13 billion yen (£85)”
Wow, Brexit has been fantastic for the exchange rate!! And here I was thinking it was an unmitigated sh*t show
fyi
fyi