Truong Hai Automobile Joint Stock Co. (Thaco) has celebrated the grand opening of its new tractor factory. What has been called Vietnam’s first modern agricultural equipment manufacturer was created through a partnership between Thaco and South Korea’s LS Mtron Corp. that was signed last year.
The tractor factory represents an investment of US $22 million and is in the Chu Lai Open Economic Zone in the seaport city of Chu Lai, Nui Thanh district, Quang Nam province, Vietnam. The plant is designed to build up to 2,000 tractors annually and started production using completely knocked down (CKD) tractors from South Korea.
As part of the agreement, LS Mtron will provide training to Thaco engineers to help increase the regional value content of the tractor components to 50% and develop its own machines for the local market.
Thaco said it expects its tractors to have a market share in Vietnam of 7% in 2018 (or 500 tractors sold), and a 38% market share – 2100 tractors — by 2026. The plant also plans to export to Laos, Cambodia, the Philippines, Myanmar and Indonesia. Combines and other implements are also planned.
Truong Hai is already a diversified manufacturer. Since 2003, it has built commercial vehicles in Vietnam with support from Hyundai and Foton. The trucks were first assembled with imported components, but the company now has its own supply chain and distribution network for vehicles such as the Thaco Auman. The company also builds automobiles under license from Kia, Mazda and Peugeot with up to 46% local content.