







Controlling costs and driving sales growth through regional manufacturing.

TOTO’s commitment to sustainability extends far beyond product performance. The economic and environmental impacts of chasing cheap labor to Asia, then shipping finished products back around the world for distribution and sale are too great to ignore. In response, TOTO has begun to explore manufacturing opportunities in the Americas—a phenomenon known as “re-shoring” or “near shoring.”

There are several factors driving the re-shoring movement. These issues are referred to as “Asian Headwinds.” Among them:

Rising labor costs (in some cases as much as 20% in a single year)

Reductions in value-added tax (VAT) rebates

Currency fluctuations

Higher energy and fuel costs and

Changes in import/export duties

Long lead times (and difficulty resolving quality issues)

Increased transportation costs

Political instability

Furthermore, Asian countries are increasingly enacting environmental controls of their own, which can further raise manufacturing costs. Currently, the U.S. and Latin America can offer lower prices thanks to:

Lower rates of inflation

Longstanding environmental policies

Stable or reduced energy costs

Increased productivity

Political stability

This is a significant paradigm shift, prompting TOTO to reexamine our strategies for production, procurement, and global distribution of our products. In fact, our Morrow, Ga. factory currently produces one-piece porcelain toilets at a lower cost than our best factory in China. As a result, we’ve shifted our entire manufacturing strategy toward building factories closer to the regions where their products are sold.



