Denso will invest several tens of billions of yen to build a new plant on the northern island of Hokkaido, a Japanese business daily reported on Thursday.

According to Reuters, the Nikkei said Denso, a Toyota affiliate, chose the region because it would be easier to find workers there than at its home base in Aichi Prefecture, central Japan, where nearly all of its suppliers are loctated.

The company reportedly plans to spend about JPY2bn to buy 200,000 square metres of land in the city of Chitose later this month and aims to start producing sensors, computer chips and other electronic parts for cars from 2008, the report added.

Denso spokesman Tomohiro Miura told Reuters the company has been considering increasing capacity, but the location, timing and other details had not been decided.