Small-scale crystal maker shines

In seven years, a small-scale Thai crystal maker has grown into a supplier to several international brands and is on track to break even this year. Even so, executives at Lotus Crystal Co. know harder…

In seven years, a small-scale Thai crystal maker has grown into a supplier to several international brands and is on track to break even this year. Even so, executives at Lotus Crystal Co. know harder work lies ahead if they want to increase sales at a time when the global economy is slowing down. The company, which says it is the only producer of handmade crystal tableware in Thailand, supplies brands including John Hardy, Dartington Crystal and Calvin Klein. “We have won recognition from several world-class crystal makers and designers in Europe and the US. They are trying to outsource production to Southeast Asia in a bid to lower costs. But we cannot serve them all because of capacity constraints,” said Krit Patumraj, the managing director of Lotus. Waterford, based in Ireland and a leading crystal maker and designer with a 200-year history, once sent its staff to observe the company“s production methods. Waterford was poised to place orders but the plan was dropped because Lotus Crystal, with monthly production at the time of 60,000 units, was unable to meet the demand for several times that quantity to supply the industry giant“s export bases worldwide. Lotus Crystal now produces between 30,000 and 50,000 units a month with a total staff of 80 at its factory in Rayong. It cannot expand output significantly because of capital constraints. The company had previously attempted to increase its registered capital by THB 35 million from 75 million through its existing shareholders to obtain funds as working capital and for business expansion, but has raised paid-up capital by only THB 20 million and was unable to expand production. Because of the capital constraints and the global economic slowdown, Lotus Crystal has now begun to change its marketing strategy. First, it has reduced minimum orders from US$ 10,000 to US$ 5,000 to attract more retail sales. Second, it makes products-to-order for brands and leading designers in order to build up a corporate reference, as well as improving product design. Third, it approaches potential customers locally and overseas, particularly hotels, resorts and restaurants that want crystal tableware. The company hopes to develop its own brand in the future if it has sufficient investment capital. “We need about another THB 20 million to build our own brand. In fact, we supply some products under the Lotus brand to countries such as Hong Kong and Taiwan, but the brand remains unrecognised,” Krit said. He added that he was confident that the company could break even this year. It had hoped to do so in the fourth year but failed because the recession started in 1997. Lotus Crystal currently exports 60% of its production, with Calvin Klein and John Hardy“s PT Karya Tangan Indah Factory in Indonesia as major customers. It has been supplying both companies for two years. Annual turnover totalled THB 40 million last year and is projected to grow by 10% this year. The company was established as an importer of crystal products but decided to start production itself after a major international producer scrapped the idea of building a local factory, citing shortages of workers and materials. Lotus Crystal“s plant began production in 1996. Its factory is located close to supplies of liquified petroleum gas, a key production material, and in Zone Three, which attracts maximum benefit from the Board of Investment“s promotional privileges. The company has hired eight German experts to train local workers in production of tableware. So far, 80 people who had previously been tapioca and pineapple growers have learnt the skills of crystal-blowing and cutting to world-recognised standards. Krit said every item made by the company carried a “Hand Made in Thailand” label. However, as these products were five times the price of machine-made crystal, the company concentrated on making upmarket crystal tableware.