Star allots B500m to build output
Star (Thailand) Co, producer of Star air conditioners, is spending about 500 million baht to double its production capacity for the export market.
Managing director Vuttikrai Uechooyos said the company is constructing two new factories on a 16-rai plot in Nonthaburi province, due to be completed in the fourth quarter next year.
It production capacity will rise to 200,000 units a year to serve export demand, particularly in the Middle East. Star will move to boost domestic sales as well.
The outlay is part of a plan to increase company sales to 2.5 billion baht over five years, double the amount from this year.
Some 70% of sales are from the domestic market, with 30% exports to the Middle East. Half of sales come from its own Star brand and the rest is from customers under original equipment manufacturing and original design manufacturing contracts.
Star has established itself in the Thai market for three decades.
Other Thai air conditioner brands left in the country include Central Air, Saijo-Denki, Amena, Uni Air, Midea and Tazaki, down from 20 brands over the past two decades.
Those that went out of business were hit by fierce competition from Japanese and South Korean brands.
Sales of Thai air conditioner brands comprise about one-third of local sales, worth 25 billion baht last year.
Apart from exports, Star wants to expand its business via border trade to penetrate the Asean market and build its domestic network in southern Thailand.
Although competition in the air conditioner market is fiercer every year, Mr Vuttikrai said there was huge potential because global warming would stimulate demand.
Continuing development of property projects both in Bangkok and upcountry, development of megaprojects and the imminent Asean Economic Community should all raise demand for air conditioners by 10-15% on average per year, he said.
Some 20% of Star air conditioners are sold to commercial buildings, with 80% to residential and small office buildings.
The company plans to spend more than 10 million baht to build brand awareness next year.