German tyre maker Continental AG has chosen Rayong to build a greenfield tyre plant for passenger cars, promising investment of €250 million (9.46 billion baht) and 900 new jobs.
According to a company statement, Continental has finalised the site selection process for the factory, which will make tyres for passenger cars and light trucks in Asia-Pacific (APAC).
In the first phase, investment in the new Rayong plant will amount to €250 million, with planned production of 4 million passenger and light truck tyres
The start of operations is planned for 2019, and Continental expects to create 900 new jobs in Thailand. This investment is an essential part of the long-term growth strategy from Continental's tyre division, called "Vision 2025", aimed at expanding and balancing its global manufacturing footprint to better serve its customers in all regions.
"This 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.
"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 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," he added.
Philipp von Hirschheydt, head of business unit replacement for PLT in Asia-Pacific, said the decision to build a new tyre site in Thailand will strengthen the company's presence in both the Thai market and the broader region.
"This plant will strongly support the company's planned business growth in both original equipment and replacement business for passenger and light truck tyres, further establishing our customer relations in both segments," he said.
Mr Hirschheydt said the company also wants to benefit from the region's growth potential in the replacement market and is confident that producing locally will enable closer cooperation with new customers to further extend its position there.
"The site selection process is very complex, as we have had to take into account not only the proximity to the markets and our customers, as well as several infrastructure elements, but also the available workforce and educational institutions that will help us recruit the best-skilled employees," said Michael Egner, greenfield project manager for Asia-Pacific.
"The Thai government, as well as several local institutions, have been very supportive partners during the entire selection process."
The site for Continental's tyre plant in Rayong province meets all of the company's requirements. It is close to the targeted markets and customers, offers good infrastructure and is only 140 kilometres from Bangkok. It also offers access to a deep-sea port in Laem Chabang, which is 60km away, and universities with a technical profile are located nearby.
The size of the site is 750,000 square metres, potentially allowing capacity expansion of up to 25 million tyres a year.
Continental expects to break ground some time this year.
Since 1999, Continental has ramped up five greenfield tyre plants in Timisoara (Romania), Camacari (Brazil), Hefei (China), Kaluga (Russia) and Sumter (US).
The project in Rayong and the greenfield project for commercial vehicle tyres in Clinton, Mississippi (US) will extend Continental's global tyre production footprint to 21 tyre plants in 17 countries.
In Asia-Pacific, Continental operates five tyre plants: Hefei (China), Alor Setar (Malaysia), Petaling Jaya (Malaysia), Modipuram (India) and Kalutara (Sri Lanka).
Since the start of Continental's Vision 2025, the tyre division has invested more than €3 billion to further expand its production capacity and research and development facilities worldwide.
In 2016, the company produced more than 150 million tyres.
