News Room - Business/Economics

Posted on 07 Mar 2008

Parts maker Thai Summit to enter China

Plans several other investments in region 

Thai Summit Group, the country's largest parts manufacturer for automobiles, motorcycles, electrical appliances and agricultural engines, is making a foray into China to tap the vast automotive market.

China produced about six million vehicles last year, a very large amount compared to the 1.3 million vehicles made in Thailand.

''Global sourcing strategies induce us to venture into China. We see it as necessary to forge a business alliance with Chinese investors since the automotive industry in China is growing fast,'' said executive vice-president Thanathorn Juangroongruangkit.

The group is scheduled to sign a joint venture agreement with Chinese partners in Bangkok tomorrow. China will become the fifth overseas operation for the group.

He declined to name the Chinese partners or the cost of the project but said the plant would be built in Hebei province not far from Beijing. It would start commercial production in the third quarter of 2009. The plant will produce 5,000 sets of parts per year for China's local automotive industry.

The Philippines and South Africa will be the next in line for investment. The group planned to venture abroad as requested by customers in both countries. ''The planned new ventures in the Philippines and South Africa are expected to be finalised before 2009,'' he said.

Summit runs factories in Ayutthaya, Samut Prakan, Nakhon Nayok, Chon Buri and Rayong. It also operates auto parts plants outside Thailand.

In India, the group has a joint venture with local partners that supplies motorcycle and stamping parts to the local automotive industry. In Malaysia, it has a joint venture with two local partners that supplies auto seats and car parts to Proton and Perudua, two brands in Malaysia.

The group also runs factories in Indonesia and Vietnam to produce parts for automobiles and motorcycles.

Mr Thanathorn said the regional growth of the automotive industry helped boost the group's consolidated revenue last year by and impressive 15% from 2006 to 38 billion baht. The performance of the group's subsidiaries abroad was outstanding, he said, contribution a large portion of revenue to the group.

The group projected that consolidated revenue would increase 11% this year due to the industry's continued growth.

Mr Thanathorn said the Thai Summit group planned to invest at least 3.5 billion baht this year to expand its business in preparation for the government's ambitious eco-car project.

About 150 million baht of the new investment would also be used to upgrade the group's technical centre in Bang Na. It planned to erect a new building with state-of-the-art equipment to cope with the group's diversified auto parts production.

Established in 1977, the group today comprises 32 companies in the parts manufacturing industry, covering press parts, assembly parts, plastic injection parts, plastic blow moulding parts, aluminium die-casting, wiring harness, chassis, stamping dies, assembly jigs and tooling. It employs about 14,000 workers.