President Katsuyoshi Okawa said yesterday that manufacturing in Thailand had been operated via Thai Okawa since 1989.

Its major products include brake-hose fittings and stud bolts for automotive assembly.

The investment aims to serve increasing demand for auto parts in Thailand, where carmaker giants from the United States and Japan have established manufacturing plants.

Thai Okawa is building a new

plant at Hemaraj Eastern Seaboard Industrial Estate in Rayong. It is due to begin operating in April 2009 and will allow the company to double its production capacity to 100 million pieces per year.

The company's existing plant at Bang Kradi Industrial Estate, Pathum Thani, will close after the new factory opens.

"Thailand is a suitable country for not only the automotive industry but also auto-part manufactur-ing because Japanese major brands and makers of auto parts have set

up production bases here," Okawa said.

Thai Okawa's production focuses on the domestic market, accounting for 60 per cent.

The president said the company decided on relocation to be nearer to Laem Chabang deep-sea port for export purposes and to be in an automotive cluster for better supply-chain access.

There are more than 100 parts manufacturers on the industrial estate.

He said rising wages in Thailand would increase production costs, despite it being cheaper than Japan. However, its investment in Thailand had improved the company's exports and domestic sales.

The company has no plans to invest in China, India and Vietnam, he added. Despite low production costs, Vietnam has no automotive supply chain and its car market is also smaller than Thailand's.

The stronger baht has not affected the company's business because of its currency management in advance. Its sales reached Bt580 million last year.

Achara Pongvutitham

The Nation