TOA 'forced' to hike prices by 5-10%
TOA Paint (Thailand) Co will gradually hike its prices by 5-10 per cent to cover the rising costs of some raw materials that have surged by more than 200 per cent.
“We’ve had to shoulder higher costs since last year but we’ve tried to maintain our production cost to help our customers affected by the natural disasters last year. But now we have to increase our prices,” TOA president Jatuphat Tangkaravakoon said in a group interview yesterday.
The company will start to adjust its prices from May-August depending on dealers’ inventories, he said. TOA targets total revenue growth of 16 per cent to Bt14 billion this year, up from Bt12 billion last year. Two-thirds of its revenue comes from paints for buildings and one-third from paints for other uses such as industrial and automobile. About Bt2 billion of its total revenue will come from overseas markets.
The main export market is Asean, with the rest going to the Middle East.
“The Asean Economic Community in 2015 will open up opportunities for our business because the market has a total population of 600 million. That will be an enticement for our expansion in this region,” Jatuphat said.
In Asean, the company exports to eight countries – Laos, Cambodia, Vietnam, Burma, Singapore, Brunei, Malaysia and Indonesia.
“We start to export to Indonesia this year. If we have good feedback, we may open our own production plant there, following our three plants in three countries in this region – Laos, Vietnam and Malaysia,” he said.
In the domestic market, TOA now has 54 per cent of the overall building paints business worth Bt13 billion. Its share is 75 per cent for premium and ultra-premium building paints, which make up about 30 per cent of the overall building-paint market.
It also has 45 per cent of the medium-priced segment, which make up about 50 per cent of the total market, and 20 per cent of the eco-friendly-paint segment, which accounts for about 20 per cent of the total market.
Demand for building paints started to recover in December after the floods hit Greater Bangkok in October and November. Home-owners need to renovate their residence and housing developers are expanding, especially into condominium projects.
Sales of building paints were up more than 10 per cent last month from January of last year.
“We believe that the building paints market will increase by 10-15 per cent this year,” he said.
The overall paint market – combining building, auto, manufacturing and other types of paint – is forecast to grow 5-10 per cent this year from about Bt36 billion last year, he added.
