Jan 26, 2012

Srithai mulls Myanmar move: too few workers, too high wages in Thailand

Srithai Superware Plc, the world's leading melamine producer, is looking to Myanmar as a production base in the near future.
President Sanan Ungubolkul will visit the country soon to look for potential locations to set up a new factory.
Srithai has about 700 workers from Myanmar at its factory in Thailand and operates its SNatur direct-sales business in Myanmar, achieving a positive response. It plans to set up a branch office for direct sales in that country this year.
Mr Sanan said if the company does build a new plant in Myanmar, it will invest 50 million baht and use it as a production base for exports.
Srithai exports melamine products to over 100 countries.
"We can't expand our production capacity in Thailand due to the labour shortage and higher wages. Myanmar and Vietnam are alternative bases," said Mr Sanan.
The planned hike in the daily minimum wage means Srithai plans to raise its product prices in April.
The embargo on Iranian oil has driven up oil prices and thus costs, another factor in the company's decision.
Apart from Myanmar, the company will spend almost 300 million baht to produce closure products at its factory in Vietnam.
Registered capital of Srithai Vietnam will go up to 335 million baht this year from 270 million.
The closure products will serve a giant soft drink firm in Vietnam as part of a three-year contract. The first delivery will start in August.
This will push sales in Vietnam this year to 540 million baht, up from 340 million last year, before rising to 600 million in 2013.
In Thailand, the firm is poised to spend one billion baht on investment this year.
Some 100 million baht will be used to expand its melamine business at its factory in Nakhon Ratchasima province, 600 million will be used for its plastic products and the remaining 300 million is for expanding its direct sales business and overseas investment.
For SNatur direct sales, it plans to expand to Cambodia and Indonesia before reaching 10 countries in a few years. Sales of SNatur are expected to reach 460 million baht this year, up from 353 million last year.
Srithai's total sales this year are projected to reach 7.8 billon baht, up from 6.65 billion last year.
SITHAI shares closed on the Stock Exchange of Thailand at 8.70 baht, down 10 satang, in trade worth 1.23 million baht.

Source: Bangkok Post