Beger Company, a Thai maker and distributor of wood coatings and industrial paint products, plans to set up its first foreign plant in Indonesia in the next five years to tap demand there.
Vice-president Worawat Chaiyosburana said the company is studying ways to set up its first factory abroad, with Indonesia offering great potential as Asean's biggest market. Beger will partner with Siam Cement Group, Thailand's top industrial conglomerate and which will provide sales channels for Beger products.
With limited warehouse space, only 80%-90% of production capacity is being used even during peak periods, the copany reported. But the company plans to expand warehouse space and apply automation to improve efficiency, so the utilization rate should rise by 1.5 times. Plant expansion will start at year-end and conclude in 2015.
Some 85% of Beger's customers are in the retail sector, 10% are in projects and 5% are international customers. Export markets include Cambodia, Laos, Myanmar, Malaysia and the Maldives.
Once the Asean single market begins in 2016, exports are predicted to grow to 20% of the company's sales.
"Even before the AEC takes place, potential in the foreign markets is quite high," said Worawat. "However, we want to grow at a slow pace and keep our image as a premium brand. Therefore, we'll take the time to select our business partners carefully."
Beger's products include those in the medium and premium price ranges, with premium accounting for 60% of overall sales.
Beger forecasts revenue growth of 20% this year from 4 billion baht last year.
Worawat said the overall market for paint is expected to grow by 5-10% this year, up from 19 billion baht in 2012. "This is due to continued growth in the real estate sector, as all developers have ongoing projects, many of which can be found outside Bangkok," he said. "Meanwhile, consumer confidence, increased purchasing power and growing demand in the repainting market have contributed to the overall growth of the paint industry."
Beger has a 20% share of the 19-billion-baht building paint market, second only to TOA, which dominates with 10 billion in sales.