US-Based Caterpillar Chooses Thailand As Manufacturing Base

[webfact]

Giant construction equipment producer chooses Thailand as manufacturing base

BANGKOK, Jan 13 – Industry Minister Chaiwuti Bannawat on Wednesday revealed that US-based Caterpillar, the world’s largest manufacturer of heavy construction and mining equipment, had chosen Thailand as its base for production of bulldozer engines to supply clients worldwide.

He said the company announced its plans to establish its first manufacturing plant in Thailand so that it could use the plant to produce engines for mining bulldozers, which have business growth potential.

The company’s decision to choose Thailand as its new production base in Asia underlined foreign investor confidence that Thailand remains one of the region's investment magnets.

It would help attract other leading companies in the same industry with Caterpillar, into Thailand and the new production base will give local parts manufactures an opportunity to receive orders from the US manufacturer, he said.

Under the plan, Caterpillar will establish its first plant on a 60,000-square metre area. Construction of the plant is set to begin early this year with its operation expected to be intact late next year.

The plant is Caterpillar’s third to be located overseas. The American company's other two offshore plants are situated in Australia and Brazil.

It is expected the project will help create at create 800 new jobs in Thailand. (MCOT online news)

-- TNA 2011-01-13

[thailandbluegrass]

Only Engines for Bull-dozers?

[Thai at Heart]

Only Engines for Bull-dozers?

There is a company making parts for them already in Pintong estate.

[Pib]

Only Engines for Bull-dozers?

Many major manufacturers worldwide today have key components made at various locations around the world, then they are shipped to other locations for assembly into the final product. It all comes down to what is most profitable for the company. This is also how Boeing builds its plane...key components manufactured around the world and then shipped to the U.S. for final aircaft assembly and flight certification. When you see a product labeled "Assembled in the U.S." (or could be any country) you can bet a majority of the components in the final assembly were manufacturer overseas and then assembled in the U.S.

[toenail]

With all the international factories that are building new plants in the Eastern Seaboard area (auto plants, electronics...) it seems that the Thais in Northern Thailand and Isaan would have opportunities to work in these factories for a better income (if that is what they desire). This process, rural population moving to the cities for jobs...subsistance farmers learning a different trade happend in Europe and North America decades ago. They didn't expect the businesses, factories to move to their poor countryside.

[Pib]

With all the international factories that are building new plants in the Eastern Seaboard area (auto plants, electronics...) it seems that the Thais in Northern Thailand and Isaan would have opportunities to work in these factories for a better income (if that is what they desire). This process, rural population moving to the cities for jobs...subsistance farmers learning a different trade happened in Europe and North America decades ago. They didn't expect the businesses, factories to move to their poor countryside.

Many, many Northern Thailand and Isaan Thai's have moved and continue to move to the locations where the factories jobs and other jobs are. Heck, most of the laborers (i.e., grounds keepers, housegirls, office workers, etc) here in my western Bangkok moobaan and in a nearby construction yard are from the Issan area and Burma. Thailand is indeed experiencing a major shift in its population from the country to the cities and industry complexes.

[geriatrickid]

Only Engines for Bull-dozers?

Many major manufacturers worldwide today have key components made at various locations around the world, then they are shipped to other locations for assembly into the final product. It all comes down to what is most profitable for the company. This is also how Boeing builds its plane...key components manufactured around the world and then shipped to the U.S. for final aircaft assembly and flight certification. When you see a product labeled "Assembled in the U.S." (or could be any country) you can bet a majority of the components in the final assembly were manufacturer overseas and then assembled in the U.S.

Yes. The approach is also a key factor in the delays associated with the delivery of the new Boeing Dreamliner and AB 380. Sometimes the dispersed outsourcing strategy is inappropriate. It is best suited to industrial manufacturers like Cat or Ford or HP.

[Pib]

Only Engines for Bull-dozers?

Many major manufacturers worldwide today have key components made at various locations around the world, then they are shipped to other locations for assembly into the final product. It all comes down to what is most profitable for the company. This is also how Boeing builds its plane...key components manufactured around the world and then shipped to the U.S. for final aircaft assembly and flight certification. When you see a product labeled "Assembled in the U.S." (or could be any country) you can bet a majority of the components in the final assembly were manufacturer overseas and then assembled in the U.S.

Yes. The approach is also a key factor in the delays associated with the delivery of the new Boeing Dreamliner and AB 380. Sometimes the dispersed outsourcing strategy is inappropriate. It is best suited to industrial manufacturers like Cat or Ford or HP.

Yeap, I agree. But I bet the probability of higher profits and lower taxes (which means higher year end bonuses for executives) by manufacturing overseas almost always overrides the concern/probability of final product delivery delays. More money in the pocket just has that effect even when it may not be a good long term business strategy. I'm not sure many business excecutives plan beyond a few years nowdays (which is their expected length of employment) regardless of what they say.

[truethailand]

With all the international factories that are building new plants in the Eastern Seaboard area (auto plants, electronics...) it seems that the Thais in Northern Thailand and Isaan would have opportunities to work in these factories for a better income (if that is what they desire). This process, rural population moving to the cities for jobs...subsistance farmers learning a different trade happened in Europe and North America decades ago. They didn't expect the businesses, factories to move to their poor countryside.

Many, many Northern Thailand and Isaan Thai's have moved and continue to move to the locations where the factories jobs and other jobs are. Heck, most of the laborers (i.e., grounds keepers, housegirls, office workers, etc) here in my western Bangkok moobaan and in a nearby construction yard are from the Issan area and Burma. Thailand is indeed experiencing a major shift in its population from the country to the cities and industry complexes.

But that major population shift is causing young parents to migrate south without their children, therefore creating that unhealthy dysfunctional unit we know as the Isaan family. It was suggested to me that two thirds of Isaan Kids are brought up by the wrong generation (grandparents) which creates its own problems as tired older people dont instill the operating system that leads to a properous and purposeful life.

Maybe Mr Abhisit would consider giving massice incentives for companies to set up shop in the NE. Its on the EWEC and goods to be at a choice of 2 ports in 12 hours. I see truck loads of Toyotas going to Lao for their journey onto China. Does anybody know exactly how much production from the Eastern Seaboard gets put on a boat. Allowing people to be with their family outside work is a must for a society to progress. The only real investment talk up here is the 70 Billion baht earmarked for the new 3rd cavalry base South of Khon Kaen. Somethings seriously wrong here when governments dont invest in deprived areas. We need to start reading between the lines and ask why is this so. My questions would be "who owns the land" that will be receiving all the rent from Caterpillar and "who will make up the 51% of Thais with a controlling interest of Caterpillar and therefore receiving profits". Why is life only ever about money

[whybother]

<snip>

Maybe Mr Abhisit would consider giving massice incentives for companies to set up shop in the NE. Its on the EWEC and goods to be at a choice of 2 ports in 12 hours. I see truck loads of Toyotas going to Lao for their journey onto China. Does anybody know exactly how much production from the Eastern Seaboard gets put on a boat. Allowing people to be with their family outside work is a must for a society to progress. The only real investment talk up here is the 70 Billion baht earmarked for the new 3rd cavalry base South of Khon Kaen. Somethings seriously wrong here when governments dont invest in deprived areas. We need to start reading between the lines and ask why is this so. My questions would be "who owns the land" that will be receiving all the rent from Caterpillar and "who will make up the 51% of Thais with a controlling interest of Caterpillar and therefore receiving profits". Why is life only ever about money

Do US companies or even BOI companies need 51% ownership?

I would expect that most of the production from the Eastern Seaboard gets put on a boat. That's the main reason companies base themselves there.

The government would need to give HUGE incentives for factories to invest in the North and North East. It's too far from anywhere and would cost heaps for companies to transport things to/from there.

The government needs to invest in infrastructure (roads/rail) in the lower North East (to start with) to get more companies to invest in those areas. The lower NE isn't that far away from the ports, so a bit of investment could go a long way.

[Pib]

The government would need to give HUGE incentives for factories to invest in the North and North East. It's too far from anywhere and would cost heaps for companies to transport things to/from there.

The government needs to invest in infrastructure (roads/rail) in the lower North East (to start with) to get more companies to invest in those areas. The lower NE isn't that far away from the ports, so a bit of investment could go a long way.

The Thai railway system is indeed weak/inadequate for cost efffective transport of most factory production, not only the output product but the input materials needed to make the output product. This inadequate railway system is probably the biggest reason you see so, so many large trucks on Thai roads...large trucks that can't provide anywhere near the the cost effectiveness of a modern railway system. Sometimes I wonder if Thailand has "not" really invested in improvement of its railway system because it would put so many truck drivers out of work.

[whybother]

The Thai railway system is indeed weak/inadequate for cost efffective transport of most factory production, not only the output product but the input materials needed to make the output product. This inadequate railway system is probably the biggest reason you see so, so many large trucks on Thai roads...large trucks that can't provide anywhere near the the cost effectiveness of a modern railway system. Sometimes I wonder if Thailand has "not" really invested in improvement of its railway system because it would put so many truck drivers out of work.

It might put some truck drivers out of work, but it would put a lot of others IN work.

[EnSvenskTiger]

If I recall correctly there is talk, even plans, of a Chinese financed railroad from S China to Bangkok and a crossing line from eastern seaboard to the coast of Myanmar. If true and done it will serve the Isaan province and open several opportunities in Thailand.

If one is critical the purpose is off course to feed China with raw material and to get their goods to the best harbors’ for export to Europe etc.

Tiger

[jayjay0]

Only Engines for Bull-dozers?

Kinda boggles the mind create 800 jobs for building a engine for bulldozers.

[jayjay0]

If I recall correctly there is talk, even plans, of a Chinese financed railroad from S China to Bangkok and a crossing line from eastern seaboard to the coast of Myanmar. If true and done it will serve the Isaan province and open several opportunities in Thailand.

If one is critical the purpose is off course to feed China with raw material and to get their goods to the best harbors' for export to Europe etc.

Tiger

I believe the completion date is 2015. With China backing it there will be less hang ups with getting started and construction.

China wants it to run from Beging sorry about the spelling all the way to Singapore. I don't think with that ambitious of a plan they are going to do a half a-s job of it.

I could be wrong but I don't think so.

[Bagwan]

If construction is planned to commence early this year then preparations are being made now. So where will this site be, or which locations are being considered? The Nation have offered nothing on this subject so it seems we have to endure even more sloppy reporting.

[paulnuek]

Don`t forget the "massive" plant in the UK (Peterlee, County Durham)

100`s of people work there.

[asiawatcher]

It's a great win for Thailand - but also don't forget if they get a comfort factor with Thai labour, the flow on may well be the machinery itself. But a lot of this decision would rest on getting US dollars to work and invested before the currency collapses. The pundits predict the US dollar will no be allowed to be exported within two year and I tend to agree. Wise move by CAT.