AAPICO Hitech Plc, one of Thailand’s leading auto parts manufacturers with a market cap of THB 12 billion (or approx. US$400 million) has announced a joint venture Memorandum of Understanding (MOU) with VINFAST Trading & Production LLC – a member of VINGROUP (Vietnam), to set up a press shop and assembly operations in VINFAST’s Supplier Park in Haiphong, Vietnam. The purpose of the joint venture is to supply BIW (Body in White) parts for the first two models of VINFAST vehicles – a Sedan and a SUV car – to be produced by the third quarter of 2019.
The total investment for this project would be THB 1.8 billion (or US$ 60 million) with AAPICO and VINFAST holding 51% and 49% equity, respectively. The plant will be built on a total area of 9.1 ha in VINFAST’s Supplier Park in Haiphong.
“We invest in a joint venture to cooperate with Aapico Hitech in the first project in manufacturing automotive parts and accessories in Vietnam. With this partnership, we believe that there will be more domestic and foreign companies joining Vietnam’s automotive supplier industry. This is an important step in creating a synchronous ecosystem for the Vietnamese automobile manufacturing industry”, said Nguyen Viet Quang, Vice President & CEO of VINGROUP.
While VINFAST will provide the premises, invest $20 million to build plant and create the best possible conditions for the factory operation, AAPICO will be responsible for the overall management of the project including total technology and know-how, plant design layout, and equipment sizing. In addition, AAPICO will also produce and provide all the jigs and dies for the VINFAST vehicles, which will have a total estimated value of THB 2.5 billion (or US$ 85 million). VINFAST, in turn, would then supply the jigs and dies to the joint venture company to produce the BIW parts for the VINFAST vehicles.
This joint venture is the largest project ever undertaken by AAPICO Group in terms of scale and would also be the Group’s second largest overseas investment after investing US$ 100 million into Sakthi Automotive Group to acquire 25.1% of its global operations in June 2017. AAPICO presently has manufacturing operations globally including India, Europe, USA, Mexico, China and now Vietnam.
“AAPICO indeed feels privileged that VINGROUP has entrusted us with this project, which will be a historic milestone for Vietnam when the first two vehicle models are launched in 2019. This project has provided a truly significant stepping stone for AAPICO to enter Vietnam, and we are confident that this is only the first step to greater things in the future for both our companies”, commented Mr. Yeap Swee Chuan, President & CEO of AAPICO Hitech Plc.
VINFAST is a subsidiary of VINGROUP, one of the largest and most dynamic business conglomerates in Vietnam with a market cap of over VND 327 trillion (over US$ 14 billion). In 2017, VINGROUP recorded a revenue of approximate VND 90 trillion (US$ 3.9 billion). While it launched the VINFAST Automotive Manufacturing Project on September 2, 2017 in Haiphong, Vietnam with the goal of building a world-class Vietnamese car brand, the VINFAST Supplier Park is intended to increase the localization of products as well as create a sustainable automobile manufacturing eco-system.