Ford Motor to invest $450 mln in new Thai plant

Ford Motor Co announced a $450 million investment in Thailand on Thursday to build a new manufacturing plant, with the bulk of the output destined for export markets as part of its expansion in Asia Pacific.

The plant in the eastern province of Rayong will build Ford Focus passenger cars from 2012 but will have the flexibility to produce a diversified range of vehicles in the future, Ford said.

"Our new, highly flexible plant is the latest proof point in our aggressive expansion strategy in the Asia Pacific and Africa region," Joe Hinrichs, who heads Ford's operations in those regions, told a news conference.

"It certainly affirms the vital role that Thailand has and will continue to play as a global production and export base for Ford Motor Company," he added.

The 750,000 square metre (8.07 million sq ft) assembly plant will have initial capacity of 150,000 units a year and up to 85 percent of its production will be for markets outside Thailand.

It had initially considered building the plant at the state-owned Map Ta Phut industrial estate in Rayong, but an environmental dispute that has halted many new plants at that estate made it shift to one run by Hemaraj Land HEMR.BK.

It will be the first plant in Thailand to be 100 percent owned by Ford.

"This is game-changing and significant for Ford. We are looking forward to developing a more successful relationship in Thailand," said Peter Fleet, Ford's president for the 10-country Association of South East Asian Nations (ASEAN).

Asia is expected to account for roughly 40 pct of growth in the auto industry over the next five to seven years, Fleet said.

"Since 2006 we have invested over $3 billion to aggressively expand our operations and ensure that we are not just competing in this region but we are actually driving its growth," he said.

Ford said it would buy up to $800 million of Thai components each year and that the plant had the potential to create up to 11,000 new jobs.

"We do see a lot of potentials here for Ford to bring in more products to this market. We need additional capacity if we are going to bring more products to this market and, yes, Thailand is a critical production hub for our plan in the future," Hinrichs said.

Thailand is one of three Asian countries where Ford has made major investments in recent years, the others being China and India.

It has invested about 50 billion baht ($1.55 billion) in Thailand, where its interests include AutoAlliance Thailand, a joint venture with Japan's Mazda Motor (7261.T), according to the Thai Board of Investment.

In July 2009 it launched a $500 million passenger car plant in Thailand in a joint venture with Mazda. This plant is also located in Rayong.

Ford has invested $510 million in a passenger car plant in China's eastern Nanjing that started production in January 2009. It has also invested $500 million in Chennai in India, where annual capacity for its small car and engine production will be raised to 200,000 and 250,000 units respectively from 2010. ($1 = 32.37 Baht)