Industry News

Shanghai Huayi Group Co., to set up a Tire Plant in Thailand

Thailand: The parent company of Chinese tire manufacturer Double Coin Holdings, Shanghai Huayi Group Co., is setting up a tire plant in Thailand in country’s rubber industrial zone, LK-Rubber Industrial City Hub (LK-RICH).

The new company, Huayi Group (Thailand) formed by joint venture between Bangkok based Tribeca Enterprise Co. Ltd., which is a subsidiary of Thai Hua Rubber Public Co. Ltd. and promoter of LK-RICH estate. According to Chinese Ministry of Commerce, both the companies signed a contract for this project in May this year.

The expected investment to be made by both the companies in this plant is approximately USD285 million, and the new plant is projected to have annual production capacity of 1.5 million truck and bus tires along with 50,000 industrial tires. The new facility is believed to spread across an area of 3.23 million square feet which is expected to offer employment to about 800 people and is further expected to generate a revenue of USD400 million when fully operation in March or April next year.

The tire produced at this plant will be available across entire Thailand and ASEAN countries along with North American market. The partner, Thai Hua Rubber is a leading company in Thailand that processes and exports natural rubber and has its presence in medical rubber gloves, rubber wood kitchenware, coffee beans, etc.

According to a recent report published by TechSci Research,Thailand Tyre Market Forecast & Opportunities, 2020”, with increasing automobile production, domestic vehicle sales, abundant rubber availability and growth-oriented government initiatives, Thailand tire market is expected to witness consistent growth over the next five years. Two-wheeler motorization rate is very high as compared to other vehicle segments in Thailand. The country is leading rubber producing nation worldwide, and accounted for around one-third of the global rubber production in 2014. Major global automotive OEMs such as General Motors, Toyota, Honda, Mitsubishi, Honda, Isuzu, Ford, Nissan, etc., have established their manufacturing plants in Thailand, in order to address increasing domestic as well as global demand for automobiles, which in turn, has been surging demand for automotive tires in the country.

As per TechSci Research, the strategic move by both the companies to set up a tire plant collaboratively, is expected to facilitate rise in the market share of  Huayi Group (Thailand) in the country’s tire market. With expanding fleet of automobiles in the country and establishment of this new tire plant, the demand for tires will arise from both OEM and replacement segment giving the company an opportunity to add new clients to their consumer base.

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