Thailand to Build New Automotive Test Center to Support Tire and NR Sectors

The Thailand Board of Investment has announced that it will be investing USD 100 million in building an  automotive testing center to support the country’s growing tire and natural rubber industries.

The new center will be built in the Sanam Chai Khet district east of Bangkok, and will include one track for testing tires and six tracks for testing cars. If all goes as planned, construction is expected to start in 2018, and the center will become operational by early 2020, according to the investment board.

Speaking about the plans for the new center, Suthon Nikomkate, director of the Thai Industrial Standards Institute (TISI) said that the R&D unit for tires is one of the government’s top priorities as it wants to upgrade the country’s rubber industry and thus increase rubber prices.

Thailand is considered the top producer of natural rubber in the world and accounts for almost 35 per cent of the global supply of natural rubber, with a market value of $25 billion a year. At least 6 million farmers across the country are engaged in the cultivation of natural rubber. Growth in the production of natural rubber has kept pace with the growth in the country’s tire industry and now Thailand has as many as 20 major tire manufacturers who have factories across the country.

Some of the leading companies who have invested in Thailand by setting up factories for aircraft tires and investing a total amount of USD 312 million include Goodyear Thailand, Shandong Linglong Tire Co and Bridgestone Corp.

Korbsiri Iamsuri, director of Thailand Board of Investment New York Office, said that several factors like the availability of plenty of raw materials like natural rubber, skilled employees, investments by the Thai government in its rubber/tire industry, and competitive tax incentives have helped to draw tire and rubber companies to Thailand. The establishment of several new tire factories is expected to ramp up Thailand’s economic and industrial development. The government is expecting the tire industry in the country to double the total production of tires to 1 million metric tons a year from the current 530,000 tons.

In order to further increase the attractiveness of Thailand as an investment destination, the country’s board of investment has implemented a package of incentives which include corporate income tax exemptions for tire companies for the first eight years, exemption from import duties on machinery and raw materials for use in production of tires for export overseas, and other non-tax incentives.

The tire industry in Thailand consumes more than half of the NR produced in the country and is currently expected to grow at a CAGR of 12 per cent in the period from 2014 to 2019.

Six of the top 10 tire manufacturers in the world including Goodyear, Bridgestone, Maxxis International, Group Michelin, Sumitomo Rubber Industries Ltd. and Yokohama Rubber Co. Ltd.have factories in Thailand. Three Chinese companies including Shandong LingLong Tyre Co. Ltd., Sentury Tire Co. Ltd. and Hangzhou Zhongce Rubber Co. Ltd also have a manufacturing presence in Thailand. When it comes to local companies, the most well known ones are Deestone, Otani, Hihero, Siam Rubber, SR Tyres Co, Roadstone and Vee Rubber Corp.