Alliance Laundry plans B3bn facility
Wisconsin-based laundry system maker Alliance Laundry is investing 3 billion baht in a 48,000-square-metre facility at Hemaraj industrial estate in Chon Buri province.
The company has already secured approval from the Board of Investment and will start churning out machines from its 350-worker facility by April 2019. The project will be developed in two 1.5-billion-baht phases.
The Chon Buri outpost will produce 32,000 machines in the first year, though Alliance estimates that the facility’s capacity will expand 58% within the first three years of operations.
Close to 90% of the equipment will be exported to other Asia-Pacific countries, and all products will be destined for the commercial market, which includes laundromats, hotels, schools, condominiums and offices.
Phase one will include an R&D facility employing 25 workers. Globally, the company has invested US$300 million (9.4 billion baht) in the last five years.
The company conducted feasibility studies in eight countries in the region before settling on Thailand, which has “the right combination of infrastructure and geographic location”, said chief operating officer Jan Vleugels.
Mr Vleugels declined to comment on the total production capacity of the company’s three existing factories. But he said that in terms of capacity, the Thailand factory will be bigger than the one in China, smaller than the one in the US and about the same size as the one in the Czech Republic.
The commercial laundry equipment market has grown at a double-digit clip in recent years, driven by lifestyle changes and population growth, said Jean Francois Gobert, director of international marketing.
According to research firm IBISWorld, rapid urbanisation in China and other Asia markets will drive a 3.5% increase in the global market for US-made washing machines. In the next five years, revenue is expected to increase at an annualised rate of 3.1%.
Markets within Southeast Asia, however, are vastly different. Malaysia and Australia are dominated by do-it-yourself laundromats, whereas Thailand and Indonesia are rife with outsourced laundry. In Thailand, a key indicator of growth is the number of beds in hotels and hostels.
Thailand has approximately 100 laundromats. A market like the US has upwards of 25,000, or roughly one for every 12,000 people, which is indicative of the growth potential of the segment in Thailand, Mr Gobert said.
The company is also making inroads with consumers, bringing its heavy-duty Speed Queen brand to households in select markets like Singapore and Australia. The home market is vastly different from the B2B segments, but its strategy and products in this segment are heavily influenced by its commercial heritage.
Sales are mostly conducted through a network of distributors, as opposed to large modern trade outlets. The company spends significantly less than 20% of its budget on marketing, the standard for competitors in the home sector, Mr Gobert said.
Speed Queens can run for upwards of 10,000 washes, he said, five times longer than the segment standard.