Thai Rung Union Car (TRU), the SET-listed vehicle assembler and auto-parts maker, will spend 500 million baht (US$ 17 million) to expand production capacity in a bid to raise revenue by 15% this year.

Managing director Sompong Phaoenchoke said the auto industry's output is expected to increase to 2.81 million vehicles this year from 2.45 million last year, representing 15% growth, so the company's growth projection is in line with the industry.

"We projected the growth of the industry base on the fundamentals of the Thai economy. Since it has an indicator that demand for the auto industry is rising, the production side needs to boost output to serve demand," he said.

By year-end, TRU will be running all production lines at its Bangkok and Rayong factories at full capacity, an increase from 85-90% now.

Of its investment budget, 200 million baht will be used for machinery to be installed in its Rayong plant. "Once the new machinery is ready to operate by the end of August, our utilisation rate will rise to 95% from 70%," said Mr. Sompong.

TRU last year spent 200 million baht to expand production capacity at its plant in Bangkok's Nong Khaem district.

The remaining 300 million baht of its investment budget will be spent on building a new painting plant. It is selecting a location and considering whether to invest by itself or to co-invest with a Japanese partner.

Mr. Sompong said the plan will be finalised by June. "The company can invest by itself by setting up a new subsidiary, but it may be a venture with a Japanese company if it is interested in us," he said.

The Thai-owned company's strengths are tooling, painting, assembly and serving as an original-equipment manufacturer (OEM) of auto parts. TRU also makes bulletproof parts for military vehicles in South Asia.

Last year's revenue totalled 3.78 billion baht, up by 67% from 2011, for a net profit of 556 million, up by 199%. Some 56% of its revenue came from tooling and OEM parts, 34% from painting and assembly and 10% from custom-made vehicles and after-sales service centres.

TRU plans to raise funds by increasing its registered capital by issuing about 300 million shares via a rights offering, public offering and private placement. The company will seek approval from a shareholders' meeting on April 22nd.