In the first phase, the investment in the new tyre plant will amount to around 250 million euros (Bt9.45 billion), with planned production of about 4 million passenger and light-truck tyres (PLT) per year by 2022.
The start of operations is planned for 2019, and Continental says it will create around 900 new jobs in Thailand.
The company says this investment is an essential part of the |growth strategy of Continental’s tyre division called “Vision 2025”, which aims to expand and balance its global manufacturing footprint to serve its customers in all regions.
“The investment in Thailand is another major step in realising the ambitious growth plans of our Vision 2025 by further improving the balance of our global manufacturing footprint and enhancing our position as one of the technologically leading tyre manufacturers worldwide,” said Nikolai Setzer, a member of Continental’s executive board in charge of corporate purchasing as well as the tyre division.
“One important pillar of our long-term strategy is to operate with an agile and flexible set-up that enables us to react fast to the market requirements, establish further production capacities in the growth region APAC and to strongly support our Asia-Pacific growth plans with high-tech production capabilities.”
Continental’s tyre division reported sales of more than 10 billion euros in 2015.
Philipp von Hirschheydt, head of the company’s Asia-Pacific replacement PLT business unit, said: “With the decision to build our new tyre site in Thailand, we will strengthen our presence in both the Thai market and the rest of the APAC region.
“This plant will strongly support our planned business growth in both original-equipment and replacement business for passenger and light-truck tyres and further establish our customer relations in both segments.
Replacement market in region
“We want to benefit from the growth potential in this region in the replacement market and are confident that our local production will also enable a closer cooperation with new customers to further extend our position in these markets.”
Michael Egner, greenfield project manager for the Asia-Pacific region, said: “The site-selection process is very complex, where we have to take into account not only the proximity to the markets and our customers [and] several infrastructure elements but also the workforce available, as well as educational institutions which will support us to recruit the best skilled employees.
“The [Thai] government as well as several local institutions have been very supportive partners during the entire selection process, [and] therefore we want to express our sincere appreciation. Now we are looking forward to a fruitful and successful long-term cooperation.”
The site for Continental’s new greenfield tyre plant in Rayong province complies with all requirements, the company says. It is close to the targeted markets and customers, offers good infrastructure only 140 kilometres from Bangkok, offers a deep-sea port in Laem Chabang 60km away, and universities with a technical profile are located nearby.
The size of the site is about 750,000 square metres, which potentially allows a capacity expansion to up to 25 million tyres per year. Continental expects the start of construction and groundbreaking before the end of this year.
Since 1999, Continental has ramped up five greenfield tyre plants, in Timisoara, Romania, Camacari, Brazil, Hefei, China, Kaluga, Russia, and Sumter in the US state of South Carolina.
The project in Rayong and the greenfield project for commercial-vehicle tyres in Clinton, Mississippi, will extend Continental’s global tyre-production footprint of 21 tyre plants in 17 countries.
In the Asia-Pacific region, Continental currently is operating five tyre plants: Hefei, Alor Setar and Petaling Jaya in Malaysia, Modipuram in India and Kalutara in Sri Lanka.
Since the start of Continental’s Vision 2025, the tyre division has invested more than 3 billion euros to expand its production and research-and-development facilities worldwide. Last year the company produced more than 150 million passenger-car and truck tyres.
Published : January 26, 2017
By : THE NATION