SCIENCE UP FRONT
Thailand’s top plastics moulder restructures businesses through research and development. By Yuthana Praiwan
EPG, the country’s top plastics moulder, is restructuring its businesses through research and development.
Eastern Polymer Group Plc (EPG) is Thailand’s top plastic moulder by capacity, but that has not lulled it into believing the strongest firm will always win. Covid-19 is a reminder to EPG to keep business plans flexible and use technology so the whole organisation can adapt to changing situations.
Major adversities the company has encountered for nearly two decades prove that innovation is one of the most powerful tools to help EPG get through troubles.
While acknowledging that businesses need to become leaner in the post-pandemic period, EPG president and chief executive Pawat Vitoorapakorn says he will never resort to an easy solution by laying off staff and instead will restructure businesses through research and development.
The lockdown measures made the company suffer sales drops in its three core businesses: plastics for auto parts under the Aeroklas brand; plastics for thermal insulation for air conditioners under the Aeroflex brand; and plastic packaging under the EPP brand.
EPG estimates that its revenue for fiscal 202021, from May to April next year, will decrease by 10% to 9 billion baht, down from 10.2 billion baht in the last fiscal year.
Good crisis management is badly needed, and in the view of Mr Pawat, who fell in love with science in his childhood, technology will be a core part of whatever approaches the company uses to sustain its businesses.
DECADES-LONG LESSONS
EPG first encountered the impact of contagious diseases in 2003 when severe acute respiratory syndrome (SARS) hit China, suspending the group’s factory construction in Shanghai for more than three months.
It later faced the widespread flooding of 2011, which froze all purchase orders as run-off inundated many provinces and Bangkok.
The latter crisis prompted EPG to change its production plan, coming up with new products most useful to people.
Its plastic moulding unit used polymer to produce kayaks to help evacuate people, especially bed-ridden patients, from their flooded homes.
The price of a kayak skyrocketed to more than three times its original price at the time, but the firm decided to make them primarily for charity.
Things appeared to go smoothly after the event, as the company saw its businesses steadily grow until the outbreak of Covid-19.
But EPG was quick to adjust itself, turning part of its manufacture to make protective equipment against the disease.
Facing a surplus of raw materials in the plastic moulding unit, the company decided to use them to make face masks at a time when Thailand underwent a severe shortage of the product.
Called EP Kare, the innovation is a washable mask made of polypropylene, a type of highly elastic plastic.
“We first made them only for our staff and charity, but the demand was very high and users are satisfied with the products, so we later launched various models for sale,” Mr Pawat said. “We kept improving the quality until we could sell them overseas.”
In April, when a high infection rate was a grave concern in Thailand, the company increased production capacity to 2 million a month.
EP Kare was registered for patents in the US, Japan and India. But the company won’t stop there; it plans to develop a mask with the same ultra-fine dust filtering quality as N95, which is certified by the US National Institute for Occupational Safety and Health.
SCIENCES AT HEART
EPG also made other new products from a team of 80 researchers. Mr Pawat said the company spends 10% of its net profit each year financing their projects, hoping to come up with new technological solutions for various industries.
Some products have already been developed for commercial scale, though the company has yet to focus on business expansion for these items. Among them are plastic linings for reservoirs and plastic coatings for the biogas production process.
Mr Pawat said the material his company invents for coatings is different from others used for the same function. The former is sturdier and more durable, specifically designed to match the strong sunlight in Thailand.
Last year the company invented a plastic component for floating solar farms, a new electricity generating utility usually installed at hydroelectric dams. This photovoltaic system is expected to become popular in Thailand soon.
Over the past three decades, EPG has introduced many new products to the market. It currently holds up to 60 patents for polymer and synthetic rubber-related innovations.
Mr Pawat attributes the successes to the company’s vision of a tech-driven strategy, which partly has its root in his interest in developing air-conditioner insulation.
NEXT CHAPTER
EPG is considering setting up a new business unit focused on life sciences and health care under one of its three core businesses as part of the company’s plan to diversify into other potential businesses.
A feasibility study is being conducted and is expected to be completed by the end of this year.
Mr Pawat expects the new business to require light capital spending because the company’s plastic moulding machines can be modified to accommodate a new production line.
The company has so far gained revenue mainly from the three core manufactures, especially in automotive and packaging segments, but with the ongoing global public health and economic crisis, EPG will seriously adjust to better match the situation.
“Now we are going to move on,” Mr Pawat said.
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We will never resort to an easy solution by laying off staff. PAWAT VITOORAPAKORN
PRESIDENT AND CHIEF EXECUTIVE, EPG