Summit Corp has set aside Bt2 billion to purchase additional land at industrial estates to prepare for an expected increase in its production of automotive exterior parts.
Wutthiphum Jurangkool, executive and procurement director of Summit Corp, said that according to the investment plan, the company will allocate Bt1 billion for the purchase of additional land at industrial estates in Rayong and Ayutthaya provinces to prepare for construction of future plants.
The plants would start producing parts for new models in 2012, he said.
He said the company will use existing facilities to serve export markets, which account for 40 per cent of total revenue. Summit plans to increase this to 60 per cent in the next three years.
He said the rest of the Bt1 billion would be used for buying new machinery to produce exterior parts, as well as to upgrade technology in preparation for increased orders and new models in the future.
Summit revenue grew by 20 per cent year on year last year, against a projection of 10 per cent.
"The growth figure confirmed that the automotive industry has become a bright spot for the economy after suffering a plunge in revenue during the global economic crisis," he said.
With the expected order increase in updated technology, Summit expects to boost its capacity utilisation by nearly 20 per cent. Wutthiphum said the company is negotiating with local partners in Indonesia to set up a motorcycle exterior-parts facility there. Details are expected soon, he said.
The motorcycle industry in Indonesia has a higher growth rate than that in Thailand, where the market is very saturated, so the company needs to shift its focus to it and other countries to support revenue, he said.
The company plans to build more auto-parts plants in Vietnam, China and India in a bid to benefit from the Asean Free trade Agreement (Afta), he said.
Wutthiphum said overseas markets contribute only about 5 per cent of the firm's total revenue. Its plan to invest overseas is expected to push to not less than 10 per cent within the next five years, he said.
"We are still focused on the domestic market, as well as the real-estate business, which Summit Corp just entered in the past six years," he said.
According to its revenue portfolio, auto-parts contribute 80 per cent of the firm's total revenue, with the rest coming from tourism and real estate.
Summit Corp expects revenue from the domestic market to grow by 10 per cent this year from Bt30 billion last year.