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  July- Sep 2008         
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Shifting into Top Gear

AseanAffairs talks to two top executives of Thailand-based auto parts companies which have set up bases around and beyond Asean. Both are looking forward to the timely advent of the much-publicised Asean single market that will bring down all the barriers and boost the business of car making in the region. Shared here with the reader is the excitement and enthusiasm from Yeap Swee Chuan, President of Aapico Hitech, and Thanathorn Juangroongruangkit, Executive Vice President of Thai Summit.

Size Matters

Q: What are the key drivers that propelled Aapico to become what it is – one of the biggest autoparts company in Southeast Asia?
A: We had to do what is best with no money. We concentrated on car jigs … by focusing on something that was in desperate need of improvement, without too much cost … we became the best in designing and making jigs. Finally people realise that this company delivers. They come to trust Aapico. It’s simply Quality, Cost, Delivery, Engineering and Management - QCDEM.

Q: Aapico went on an acquisition spree after it got listed on the SET in 2002 until last year. How is it paying off?
A: It’s a strategic decision. We were a small company in 2002.In the auto parts business, you must be reasonably big in size if you want to be a strong business. We bought over Dana in Thailand in 2003. That was a 2 billon acquisition - a reverse globalisation. Nobody thought that we could do that. Very expensive, very difficult and it was run by Americans, everybody said it was hard but that’s good, nobody would like to pass a project like that. Today it’s a very excellent company. Quality, delivery, communication … everything has improved. Isuzu is very happy, and has given us a new project. Then we acquired to KPN, a public company. Nothing to worry. It is a forging business. KPN company dragged us down a little bit but we have organised it now.

Q: Recently, you have started working on joint-ventures. How would that strengthen the company?

A: You see … our company will look at the synergy … one plus one can be four. We got to synergise with our business. We joined with Fuji Technika, one of the biggest dye makers in the world, which could take us to another level .Fujiteknica has a jig factory, which is the second biggest in Japan. We are in high volume in jigs in Thailand.  So if you want to marry somebody, marry the best in the world. It makes it easy then to improve our business. Then it would be easy for us to improve our business. Besides, technology takes a long time to build.

Q: You said in March that you expected Thailand’s automotive production to rise from 1.24 million units in 2007 to 1.45 million units in 2008. Would you keep that output forecast, or should it be revised down?
A: There was some downturn in Thailand but the export market remained strong until March, and its too early to revise forecast. Maybe, after the second quarter. The local market last year was about 680,000, while 700,000 is export. Export is still strong, up 35 percent in growth. Even if the domestic market Thailand is flat, exports will keep us growing.


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