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AAPICO set for joint venture in Vietnam

Thai auto parts manufacturer AAPICO Hitech has formed a joint venture with Vinfast to manufacture Body in White (BIW) in Vietnam.

BIW refers to the stage in automotive design or automobile manufacturing when the sheet metal components of a car body are welded together.
AAPICO said it had signed a memorandum of understanding (MoU) with Vinfast Trading and 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 parts for the first two models of Vinfast vehicles – a Sedan and an SUV – to be manufactured by the third quarter of 2019.
The total investment for this project would be Bt1.8 billion 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 hectares.
“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 and chief executive officer of Vingroup.
While Vinfast will provide the premises, invest US$20 million (Bt640 million) to build the plant and create the best possible conditions for the factory operations, 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. Vinfast 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 the $100 million into Sakthi Automotive Group to acquire 25.1 per cent of its global operations in June 2017. AAPICO presently has manufacturing operations globally, including India, Europe, USA, Mexico, China and now Vietnam.
“AAPICO 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,” said Yeap Swee Chuan, president and chief executive officer of AAPICO Hitech Plc.

Published : June 12, 2018

By : The Nation