Ocean Glass Plc has invested THB 670 million to turn its glass tableware into a top regional brand strong enough to compete with European imports.
Kirati Assakul, executive director of OGC, said the …
Ocean Glass Plc has invested THB 670 million to turn its glass tableware into a top regional brand strong enough to compete with European imports. Kirati Assakul, executive director of OGC, said the new investment would be spent on increasing the company“s annual production capacity by 20% to a total of 26 million pieces per annum. By the middle of 2005, OGC“s Bang Poo factory in Samut Prakan will be able to produce 150 million items of glassware per annum. With the expansion, Mr Kirati said OGC expects to increase sales to THB 1.4 billion in 2005, up from the 2004 target of THB 1.3 billion . The higher capacity, expected to be totally utilised within two years of completion, will boost company revenue to THB 1.6 billion by 2006. The OGC plant would then become the largest of its kind in Asean. Currently, Ocean Glassware leads the billion-THB glass tableware market in Thailand with a market share of 40%, he said. Founded 25 years ago by Ocean Life Insurance, OGC is still 40% controlled by the Assakul family. Earlier in June 2004, the glass tableware maker consolidated with its non-listed subsidiary Ocean Sasaki Glass (OSG). Japan“s Toyo Sasaki, a joint venture partner with OSG for 10 years, holds about 3% of OGC. Marketing and sales manager Suphote Sriudom said marketing activities in Malaysia, the Philippines and Singapore are aimed at creating “a single brand entity” for Ocean Glassware across the Asean market. The move would enable the Thai manufacturer to increase product variety and raise its brand image to compete with leading brands from Italy, Germany and Turkey. Ocean Glassware has also aggressively expanded its market share in Vietnam after the Hanoi government cut import tariffs on glass tableware by half to 20%. Ten percent of OGC“s total exports go to destinations in Asean, with Vietnam accounting for half of those sales, Mr Suphote said. Meanwhile, the company has increased its penetration in the South Asian market after India liberalised its glass tableware market to allow imports. The rest, or 65% of Ocean Glass“s capacity, is exported to Europe, the Middle East, the United States, Africa, Australia and New Zealand, leaving a quarter of its output for the domestic market, he said. Local sales reached THB 290 million in the 1Q 2004, almost flat compared with the same period 2003, while profit was THB 30 million. Managing director Supawan Kanyaprasith said the company plans to fund its capacity expansion with a mixture of banks loans and operating profits. Negotiations with local banks are expected to be concluded within the next few weeks. With existing liabilities of about THB 100 million , OGC“s debt-to-equity ratio is 1:0.3. It would remain “low” at 1:1 after the new loans, she added.