Thailand's first-ever rubber industrial estate valued at a combined 3 billion baht will be established in Rayong on a plot of about 2,000 rai.
The investment belongs to Thai Hua Rubber Plc, which recently set up a new subsidiary called Thai Beka Co with registered capital of 1.25 billion baht to run LK Rubber City Hub in the province.
Luckchai Kittipon, the chief executive of Thai Hua Rubber, said the development project will be divided into three phases, with the infrastructure construction phase now in progress.
The project is due to be up and running next year and in full operation in 2016.
He said the estate will employ as many as 10,000 workers and handle 500,000 tonnes of rubber a year, mainly for supply from nearby provinces such as Trat, Chanthaburi, Chon Buri, Chachoengsao, Sa Kaeo and Prachin Buri.
Mr Luckchai, who is also the honorary president of the Thai Rubber Association, said the venture would use rubber as the main material in constructing the road within the estate as a prototype.
Despite rubber-based road construction costing around 5% more than asphalt, the working lifespan of a rubber road is about eight years longer than an asphalt one.
He also called on the government to use rubber for road construction in a move to address ongoing rubber protests in the South.
"A one-kilometre stretch of road in 70,000 villages nationwide for instance could use up to 300,000 tonnes of rubber. This would help immediately to absorb supply in the market and shore up local rubber prices."
Referring to the government's plan to set up rubber industrial estates along the Thai-Malaysian border, Mr Luckchai said the project was expected to take decades to make it viable.
Deputy Prime Minister and Commerce Minister Niwatthamrong Bunsongphaisan and Mustapa bin Mohamed, Malaysia's minister for international trade and industry, recently discussed jointly promoting border trade and investments, particularly in halal food and rubber.
The Malaysian minister also proposed that a rubber industrial estate be set up along border areas under the Indonesia-Malaysia-Thailand Growth Triangle and the Joint Development Strategy for Border Areas frameworks between Thailand and Malaysia.
In a related development, Mr Luckchai said Thai rubber exports are expected to be slightly higher than last year by volume but may fall by 5-10% in baht terms due to bearish global demand and the strong baht.
Overall, the country is expected to ship 3.2 million tonnes, a marginal increase from 3.1 million tonnes last year.
Shipments are expected to drop by 5-10% from US$8.75 billion last year.