Machine tool giant Mori Seiki Co. Ltd. reportedly will proceed with plans to build a new machine manufacturing plant in the U.S., specifically in California. The estimated $60-million project was revealed in Japan by the Nikkei news service.

The news service reported that the new, 89,000 sq. meter plant would be built near Mori Seiki’s recently established research center in Davis, Calif. The plant would specialize in producing horizontal machining centers, with a design capacity of 80 machine centers per month. Employment is projected to be about 200.

No announcement has been made by Mori Seiki or its U.S. organization.

However, earlier this year Mori Seiki confirmed it was evaluating plans to start machine tool manufacturing in the U.S. because of the difficulty of serving the North American market as currency exchange rates fluctuate between Japan (where most of Mori Seiki’s manufacturing is done) and the U.S. Adding production capability in North America might offset any disparity in the exchange rate between the two currencies.

“If the value of the U.S. dollar declines, it will become fiscally advantageous to manufacture machine tools in North America, eliminating the cost of importing from Japan,” explained the company’s president Dr. Masahiko Mori, in January.

At that time Mori Seiki estimated that adding a new factory in North America would raise its total monthly output capacity by approximately 100 units to slightly more than 900. It said this level of increase would prepare it for the global expansion of machine tool sales it anticipates.

Mori Seiki operates four factories in Japan, and another in Switzerland.

Also, since the time of the January announcement Mori Seiki has consolidated its U.S. business with that of DMG. The two groups have a cross-ownership arrangement and co-market their machine designs and technologies worldwide. DMG / Mori Seiki USA is headquartered in Hoffman Estates, Ill.