CWT branches into auto fabric seats via JV
Chai Watana Tannery, a leading leather producer and manufacturer of automotive seat covers and interior trim, will form a joint venture with Toyo Bussan for the expansion of its product line to fabric auto seats.
CWT yesterday signed a one-year memorandum of understanding for a business partnership with the Japanese company, under which it will become a Tier 2 maker of fabric auto seats supplied to Toyo Bussan under subcontract.
Toyo Bussan will also move one-third of its fabric-auto-seat facility in Fukushima to CWT’s factory near Bangpu Industrial Estate in Samut Prakan.
CWT president Weerapon Chaiteerath said the joint-venture company would be set up within a year under the agreement with Toyo Bussan. CWT will hold at least 51 per cent in the two-way joint venture.
He said CWT would promote itself as a holding firm in the future with many diversified subsidiaries under its umbrella, each responsible for different high-potential products such as leather, fabric and green products.
The partnership with Toyo Bussan, which has strong production skills in fabric auto seats and furniture products, will provide CWT with greater capability and efficiency in producing fabric seats and to cash in on increasing vehicle demand in Thailand, especially for eco-cars priced less than Bt1 million on average, as driven by the government’s first-car campaign, he said.
"We expect the total number of cars manufactured in Thailand to reach 2 million this year, up from 1.7 million produced last year," Weerapon added.
He said fabric seats now accounted for about 70 per cent of the local vehicle market, both passenger cars and pickups, with the remainder being leather seats.
"With Toyo Bussan’s relocation of [one-third of] its fabric auto seat facility from Japan to our plant in Samut Prakan, we expect initially to produce fabric seats for about 10,000 vehicles monthly this year.
"However, with the joint venture, which requires an additional investment of about Bt50 million, the plant will increase its capacity and be able to serve more than 20,000 vehicles per month," the executive said.
Makoto Sawaki, technical adviser at Toyo Bussan, said the company had strong confidence in the potential of Thailand, especially its auto industry, and would use the country as its base to export to neighbouring markets in Southeast Asia.
The company’s aim is to become a top-10 manufacturer of fabric auto seats and related products in Asean, he said.
