Siam GS Battery, an affiliated firm of Siam Motors Group, plans to spend 1 billion baht from 2018-20 to expand its production capacity of car batteries in Thailand and Myanmar, serving demand in Southeast Asia.
Established in 1968, Siam GS Battery is a joint venture between Siam Motors and Japan's GS Yuasa Corporation. Siam Motors owns a 40% stake while the Japanese counterpart holds a majority stake.
Of the budget, 750 million baht will go toward increasing lead-acid battery production at its plant in Bangpoo Industrial Estate in Samut Prakan.
Prakasit Phornprapha, Siam Motors' executive vice-president, said the Samut Prakan facility produces 4 million batteries per year and production is set to increase another 500,000 units by 2018.
The vehicle battery production is set to reach 5 million units by 2020.
Mr Prakasit said this expansion is aimed at supporting all business units of Japan's GS Battery because the Thailand production facility is the largest hub in Southeast Asia.
Siam GS Battery is in charge of sales distribution markets in Thailand, Myanmar, Laos, Cambodia and Malaysia.
"The increased output in Samut Prakan will be shipped back to Japan, starting from September onward at around 10,000 units per month and 300,000 units per year from 2019," he said.
The remaining budget of 250 million baht has been allocated to the factory and warehouse at Tilawa Industrial Estate in Myanmar with a capacity of 100,000 batteries per year, scheduled to start operations in late 2018.
Mr Prakasit said the factory in Myanmar is a battery charging site, where all products are imported from Thailand.
"That market is also very important for Siam GS Battery as the brand has a 35% market share and sees demand of 350,000 car batteries per year," he said.
"The factory in Myanmar makes it possible for us to expand the operating site for lead-acid batteries, but the market has to reach roughly 500,000-600,000 units annually."
Furthermore, Siam GS Battery has already acquired a 70% stake of the battery manufacturing plant in Penang, Malaysia in a bid to serve the local market with other products from Thailand.
Siam GS Battery's products make up roughly 55% of the local replacement market, while 25% of the battery output goes to carmakers and heavy machinery manufacturers in Thailand.
The remaining 20% of production is exported to four countries, including Japan. Myanmar is the company's majority market, representing 51% of total exports and Malaysia accounts for 19%.
Mr Prakasit said GS Battery controls a 40% share in the local replacement market, while 3K Battery and FB Battery rank second and third with 19% and 18%, respectively.
As a result of its ambitious plan for 2018-2020, Siam GS Battery expects 5-8% revenue growth annually, from 10 billion baht in 2017.
In Thailand, the increasing car population will have a positive impact for the company.
"We forecast overall sales volume will be over 900,000 units in 2018, up by 3.2%," said Mr Prakasit.