Japan's Toyo Tyre & Rubber plans to build a tyre plant in South-east Asia and has short-listed Thailand and Vietnam as likely investment locations, according to Thai press reports citing Pornchai Kruayatidee, managing director of the company's Thai distributor Khow Inter Business.

Khun Kruayatidee said the investment would likely follow Toyo's planned restructuring of its Chinese operations, which involves withdrawal from its Jiangsu-based joint venture to focus on a new JPY10bn wholly-owned greenfield site due to become operational in 2011 with a capacity of 2m units a year.

He added that Toyo views Thailand's well-developed infrastructure, local natural rubber supply and high vehicle production volumes as major 'positives' for the country as an investment destination. But competition from other tyre manufacturers is strong here and political uncertainty is another "risk factor". Khow Inter Business sold 70,000 imported Toyo tyres in Thailand last year.

Vietnam currently does not have a local vehicle tyre plant so Toyo would benefit from first arrival status and a lack of local competition. The plant would serve the ASEAN regional market.

Tony Pugliese