Ceramic Tile maker Sosuco investing Bt1.4 bn to save energy

The company will also spend another Bt300 million in 2014 to raise the combined production capacities of its two factories in Saraburi province, Sosuco Ceramic and Siam Ceramic Group Industries, from 48 million square metres per annum currently to about 52 million square metres. This is mainly to serve the increase in domestic demand for ceramic tiles, which rises by at least 5 per cent every year.

Pramoth Phromaue, managing director of Sosuco Ceramic Co, said that with this investment it expected to reduce its energy costs by about 5 per cent per year over the next three years. The energy-saving project is part of the company’s preparation for the Asean Economic Community (AEC), which will be fully effective in 2015.

Sosuco and Group (2008) saw Bt2.3 billion in sales in the first five months of the year, up about 10 per cent year on year as a result of domestic-market growth of 7-8 per cent. The company aims for total sales of Bt5 billion and to maintain its market share of 25 per cent this year.

It is also optimistic about the coming of the AEC, as it believes that Thailand has an advantage in labour skills and product design.

Pramoth said Sosuco would be able to cash in on the AEC through its strategic partners – Surya Siam Keramik and KIA in Indonesia and Mariwasa Siam Ceramics in the Philippines – which are quite aggressive in their own and neighbouring markets.

Along with SCG’s policy to go regional, the company plans to expand its ceramic-tile business, in both sales and

production, to other markets, especially Vietnam and Myanmar, in the near future.

According to Sosuco managing director Kittichai Kraikokit, the overall market for ceramic floor and wall tiles is upbeat, with expected year-on-year growth of 7-8 per cent due to home renovations after the flooding in 2011. Consumers increasingly use ceramic tiles for their walls and floors because they are durable, resistant to water damage, easy to clean, resistant to dust and germs, and non-flammable.

"Nature-inspired designs are popular at the moment, and Sosuco’s well-received products are in marble, granite and wood patterns," he said.

Sosuco says it is a market leader in creating new tile designs, with new products launched every month to cater to all consumers’ tastes. Total demand for ceramic tiles in Thailand is about 150 million square metres per annum. Sosuco now supplies about 30 million square metres of tiles every year, controlling 25 per cent of the market.

Kittichai said the Asean region had been recognised as a strong-growth market with a clear direction for regional cooperation, particularly in the food and energy sectors, and Thailand has been closely regarded as a potential centre of cooperation in many fields.

"Sosuco has high production capacity and professional management. We also send representatives abroad to study the industry regularly to gain useful information for production improvements, while employees’ skills at work and in |foreign languages have been enhanced," he said.

"In my opinion, the most interesting market in the Asean region is Myanmar, which is opening up and developing its public and economic infrastructure. Sosuco has marketed our products there since 2003, and we have appointed an exclusive agent as well as having more than 200 outlets selling our products. Sosuco is considered a high-end brand in Myanmar.

"The coming of the AEC is our opportunity to extend good experiences to many more people.

"We do not focus on price competition or minimising costs through the use of cheap labour because we never think of profit as the ultimate goal. Instead, our business is led by virtue. We emphasise honesty, support and gratitude. We select quality workers and give them higher payments than the industry standard in order to create quality products."

At present, Sosuco has about 1,600 sales representatives in Thailand, divided into 350 in the North, 500 in the Northeast, 400 in the Central region, 200 in the South and 150 in the East. Its export markets include 35 countries in the Middle East, Africa, Europe, North America and Asia.

The combined production capacity of Sosuco’s two factories is 48 million square metres a year. This is expected to be sufficient to satisfy average demand for at least five years, so Sosuco is confident that it can effectively meet the demands of the AEC.

Production standards are strictly controlled at the two factories, earning Sosuco many local and international standard certifications. These include ISO 9001 for quality management, ISO 14001 for environmental management, ISO 13006 for ceramic-tile quality, OHSAS 18001 for occupational health and safety management, product certification from the Thai Industrial Standards Institute, and the Carbon Reduction Label from the Thailand Greenhouse Gas Management Organisation (Public Organisation) and the Thailand Environment Institute.

Pramoth said: "Sosuco tiles have long been recognised among Asean countries. We have been certified with the Philippines Standard and a product certification from SIRIM QAS International Malaysia. Also, our business partners include tile manufacturers in Asean countries such as Indonesia and the Philippines, making us completely prepared to welcome the era of the Asean Economic Community."