The SET-listed automotive parts maker Aapico Hitech Plc (AH) is planning a major expansion in China as it seeks to increase its revenue from the mainland to 3 billion baht in three years from the current 800 million.
President and chief executive Yeap Swee Chuan said the company aimed to balance the revenue generated from local and overseas operations over the next few years by expanding continuously in Thailand, China and to India.
Thai operations currently account for 70% of the group's sales, with Chinese and Malaysian subsidiaries generating 10% and 20%, respectively.
Aapico, which operates three factories in China, is in the process of buying a 25-rai land plot in Kushan, west of Shanghai, to consolidate production and prepare for future expansion, said Mr Yeap.
The new consolidated forging factory, with a targeted capacity of 6-7 million units of connecting parts, is expected to reach full production by the end of next year. It will serve major customers such as General Motors, Chery and Schneider Electric, he said.
''Chinese demand is very strong with annual vehicle production of 13.6 million,'' he said. Aapico may also look at building a new press-part factory on the mainland.
Mr Yeap declined to give details on the planned investment in China but said the company's total capital expenditure this year would be no more than 500 million baht, compared to 1.5 billion it spent on a major expansion last year, including three factories in Rayong.
Meanwhile, the company has been studying investment opportunities in India where several proposals have been made to Aapico, including mergers and acquisitions.
The group aims to become a leading Asian auto parts manufacturer with strong operations in China and India.
In Thailand, the outlook of the automotive industry this year is promising as the forecast for overall vehicle production has been revised up to 1.6 million units up from 1.4 million previously. Market potential for eco-cars and small models is very strong while Isuzu, Ford and Mazda are planning new pickup truck models in two years.
Aapico supplies parts for Nissan's March eco-car and has orders for a similar project from Honda. The company has been under price negotiations for Suzuki and Toyotas Economic Family Car (EFC), while India-based Tata has switched from eco car to the Nana model, said Me Yeap.
Barring a major industry interruption, Mr Yeap said the company's revenue would definitely increase to 9.2-9.4 billion baht this year. First-quarter revenue rose 61% year-on-year to 2.4 billion baht and AH returned to profit with earnings of 55 million baht, compared with a loss of 67 million a year earlier, thanks to the recovery of the automotive sector.
Shares of AH closed yesterday on the Stock Exchange of Thailand at 8.75 baht, unchanged, in trade worth 2.75 million baht.
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