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.