AAPICO Hitech Plc has announced a joint venture MOU (Memorandum of Understanding) 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.
According to AAPICO Hitech, which is one of Thailand’s leading auto parts manufacturers with a market capital of Bt12 billion ($400 million). the purpose of the joint venture is to supply BIW (Body in White) parts for the first two models of VINFAST vehicles – a sedan and a SUV – to be produced by the third quarter of 2019.
The total investment for this project is Bt1.8 billion (US$ 60 million) with AAPICO and VINFAST holding 51 per cent and 49 per cent equity, respectively. The plant will be built on a total area of 9.1 ha (approximately 57 rais) in VINFAST’s Supplier Park in Hai Phong.
“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”, Yeap Swee Chuan, president & CEO of AAPICO Hitech Plc, said.
The 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 $100 million into Sakthi Automotive Group to acquire 25.1 per cent of its global operations in June last year. AAPICO presently has manufacturing operations around the world including India, Europe, USA, Mexico, China and now Vietnam.
“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”, Nguyen Viet Quang, Vice President & CEO of VINGROUP, said.
While VINFAST will provide the premises and invest $20 million to build the plant, AAPICO will be responsible for the overall management of the project including total technology and know-how, plant design layout, and equipment sizing.
In addition, AAPICO will also produce and provide all the jigs and dies for the VINFAST vehicles, which will have a total estimated value of Bt2.5 billion (or US$ 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.
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 approximately 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.