Hong Kong-listed Prinx Chengshan Shandong Tire is planning to build a US$600 million (19 billion baht) tyre manufacturing plant in Chon Buri, marking its first foothold overseas.
To run the plant, the parent firm set up a local subsidiary, Prinx Chengshan Tire Thailand.
Yesterday, Prinx Chengshan signed a land purchase contract with SET-listed WHA Corporation to acquire a plot of 280 rai at the WHA Eastern Seaboard Industrial 3 (WHA ESIE 3).
A groundbreaking ceremony was held on Sunday.
Prinx Chengshan plans to complete construction sometime in 2020, expecting to produce 12 million tyres a year.
Of the total capacity, 10 million was allocated to passenger car tyres, with 2 million for buses and trucks.
The Chon Buri plant is set to serve mainly Southeast Asia, Europe and the US, with 10% of capacity expected to go to the domestic market.
Che Baozhen, general manager of the local unit, said the flagship Eastern Economic Corridor (EEC) scheme encouraged the Shandong-based parent firm to choose Thailand as the first overseas facility.
"The government has launched many attractive policies for foreign investors, while Thailand has a strong position in Southeast Asia from which to operate tyre manufacturing sites," said Mr Che.
"The country is also the world's largest rubber producer."
He said the company plans to source rubber materials from Thai farmers, numbering about 180,000 tonnes per year.
The other reason Prinx Chengshan decided to invest in Thailand is the trade war between the US and China, he said.
"Many Chinese companies are attempting to evade US tariffs through plant relocation," said Mr Che.
Jareeporn Jarukornsakul, WHA's chairman and chief executive, said WHA ESIE 3 is the company's 10th industrial estate.
The estate has been approved as an EEC industrial promotional zone.
WHA ESIE 3 has 2,198 rai for sale in Nong Yai district. The industrial estate will serve investors in next-generation industries such as automotive, robotics and automation, logistics and aviation.
"We want to sell all available land in WHA ESIE 3 within two years, based on demand from Chinese and Japan investors," she said.
Industrial development accounts for 29% of WHA's revenue, and the group aims to sell industrial lands spanning 1,600 rai, developing 2,650 rai in 2019.
Some 1,400 rai of the planned sales will come from local industrial estates, with 200 rai sold at its Vietnam facility.
WHA has already developed 10,000 rai for industrial estates out of its land bank of 68,000 rai.
Some 58,000 rai is in Thailand while Vietnam has roughly 10,000 rai.
WHA plans to spend 10 billion baht in 2019 for industrial development, with 5 billion for WHA ESIE 3 to expand infrastructure in the industrial estate.
WHA set aside 800 million baht for the Vietnam facility, with the remaining 4.2 billion for other undeveloped industrial estates.
