New warehouse to make Thailand hub for Kubota parts

“Siam Kubota Parts Centre at Navanakorn Industrial Estate, Pathum Thani province, will supply the demand in 51 countries globally including Thailand, Asean, India, Australia, the US, Canada, and African countries,” Siam Kubota Corporation president Hiroshi Kawakami said.

Siam Kubota is a joint venture between Japan-based Kubota Corp and Thailand-based Siam Cement Group.

As of the first half of this year, the Kubota group, a manufacturer and distributor of agricultural machinery, had invested Bt7 billion in Thailand since 2008, Kawakami said.

He added that the parts centre in Navanakorn would be company’s second-largest outside Japan, after one in the United States. The centre will store 50,000 items, for a total of 2 million pieces, in 28,000 square metres in a single warehouse. 

After the opening of its new warehouse, the company targets revenue growth of 10 per cent in 2015 compared with this year, thanks to higher exports, especially to Asean countries, he said.

This year, Siam Kubota expects revenue of Bt50 billion, about the same as last year, as demand for agricultural machinery and parts has been flat. Last year revenue grew by 30 per cent from 2012 to Bt50 billion. Sales this year have been hit by low agricultural prices; in 2013, crop prices were stronger, especially for rice, which benefited from the government’s pledging programme, he said.

Currently, Siam Kubota has annual capacity to produce 80,000 tractors, 140,000 power tillers, and 100,000 units of other agricultural machinery. Its factory this year is running at about 70 per cent of its production capacity, down from 80 per cent last year because of the lower demand.

However, the company believes that its revenue will grow by 10 per cent next year after its expands exports in Asean countries such as Laos, Cambodia, Vietnam, Indonesia, the Philippines and Myanmar. It targets exports to account for 25 per cent of total sales next year, up from 20 per cent this year, Kawakami said.

Siam Kubota estimates that overall demand for agricultural machinery in Asean countries will amount to about Bt100 billion this year, 70 per cent of the total in Thailand. This country is the No 2 sales source for the Kubota group outside Japan, while the US ranks first.

However, the potential for higher sales elsewhere in Asean is strong given high levels of regional economic growth, he said.

At present, the group has offices in Malaysia, the Philippines, Indonesia, Cambodia and Laos. Expansion in Asean will be driven by using Thailand as its regional spare-parts hub.