The Nation March 7, 2012 1:00 am
Electrolux is setting up its first Asean-based refrigerator factory in Rayong to cash in on the coming Asean Economic Community (AEC), which will be fully implemented in 2015.
The company declined to disclose the investment figure for the new plant. On the same site as its washing-machine factory, its stone-laying ceremony was held Monday and it will start operations by early next year.
Sutti Manokitjarunman, general manager of Electrolux Thailand, said the company would reveal details of its new factory in the next two weeks.
"The expansion represented by the new refrigerator plant is in line with Electrolux's strategy to promote Thailand as its hub for Asean and to prepare ourselves to cope
with the coming trade liberalisation in the region, once [the AEC] takes full effect," Sutti said.
He said the company had begun moving into regional markets, starting with Laos more than a year ago and Burma eight months ago.
The refrigerator plant will be the second manufacturing facility operated by Electrolux in Thailand after the washing-machine factory, which was set up in 2004.
Electrolux spent about Bt225 million in 2010 to expand the washing-machine factory. Through the investment, the company has been able to double the capacity of front-loading washing machines at the Rayong factory this year. About 90 per cent of production has been for export to the Asia-Pacific region and Europe.
The refrigerator plant will be Electrolux's first such site in Asean. The company has one in Australia.
"We will also export refrigerators from our Rayong plant, initially to potential markets in the Asia-Pacific region. Exports will account for between 80 and 90 per cent of production," Sutti said.
The expansion is aimed at taking advantage of the AEC, which will bring a huge increase in the number of potential customers, up from 66 million people in Thailand to about 600 million people in Asean, which will be treated as one single market. The move is expected to benefit local manufacturers, who will be able to boost export volumes.
Sutti said Thailand itself was still recognised by Electrolux as a market with strong growth potential. Despite the serious political conflict in 2010, Electrolux Thailand was able to grow its domestic sales by 20 per cent, its highest rate in six years at that point, followed by a new record of 21 per cent last year.
"We target overall sales growth of 15-20 per cent this year."
Electrolux has led Thailand's market of front-loading washing machines for 11 years. The company has a market share of about 40 per cent in the segment.
Thailand's white-goods market grew by 14 per cent to Bt38.7 billion in 2010, according to a survey by GFK Marketing Services (Thailand).
The market grew 10 per cent to about Bt42.9 billion last year, and is expected to grow by another 10 per cent to Bt47 billion this year.
Three major products - air-conditioners, washing machines and refrigerators - account for about 70 per cent of the white-goods market. Electrolux is looking to boost its share of the market for all of them, Sutti said.