Continental selects Thailand for new tire plant

RAYONG, Thailand—Continental A.G. has selected a site in Thailand's Rayong Province for its next tire plant, a car and light truck tire factory.

Continental expects to break ground this year and should bring the plant on stream by 2019. The German tire maker said the factory will produce 4 million tires a year by 2022 and will employ 900 workers in the start-up phase.

Conti is budgeting $265 million for the first phase of the project, which will help the tire maker strengthen its presence in Thailand and the Asia/Pacific Rim markets, according to Philipp von Hirschheydt, head of Conti's APAC passenger/light truck tire business unit.

The plant site and surrounding infrastructure would allow for a potential expansion of up to 25 million tires annually over time, Conti said.

"This plant will strongly support our planned business growth in both original equipment and replacement business for passenger and light truck tires and further establish our customer relations in both segments," Hirschheydt said.

"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," he added.

Nikolai Setzer, the member of Conti's executive board in charge of corporate purchasing and the Tire Division, said the Thailand plant is a major step toward finding a balance within the company's global manufacturing footprint.

"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," Setzer said.

Michael Egner, project manager, greenfield APAC, lauded the Thai government and other local institutions for being very supportive partners during the selection process.

"The site selection process is very complex," he said, "where we have to take into account not only the proximity to the markets and our customers, several infrastructure elements but also the workforce available as well as educational institutions which will support us to recruit the best skilled employees."

The 185-acre site in Rayong Province complies with all requirements, Conti said. It is close to the targeted markets and customers, offers a good infrastructure being less than 90 miles from Bangkok and 35 miles from the deep-sea port in Laem Chabang.

There also are universities with a technical profile located nearby.

Since the start of Continental's Vision 2025, the Tire Division has invested more than $3 billion to expand its production and research and development facilities worldwide. Included in that sum are five greenfield tire plants—Timisoara, Romania; Camacari, Brazil; Hefei, China; Kaluga; and Sumter, S.C.—with one more, in Clinton, Miss., under construction.

The Rayong plant will be Conti's sixth factory in the Asia/Pacific region. The others are in Hefei, China; Alor Setar and Petaling Jaya, Malaysia; Modipuram, India; and Kalutara, Sri Lanka.