Pan Asia Footwear to end foreign brand output

Pan Asia Footwear has decided to end its contract manufacturing of shoes for foreign brands at the end of this month, which will affect 2,000 workers. They will receive layoff compensation. 

The company will downsize its business to only three or four locations and will focus on the domestic market, supplying ICC International, said Sommart Kunset, director and general manager of Pan Asia Footwear. 

He said Pan Asia Footwear was forced to downsize to curb operational losses it has endured for several years as production costs are not competitive with China and Vietnam. Should the company wish to continue making shoes, it will have to produce value-added products with higher quality and prices than its main low-cost, low-price rivals. 

Pan Asia Footwear will switch from contract manufacturing for others to form a holding company and let the remaining three or four subsidiaries produce goods for the domestic market. Those subsidiaries currently employ 1,000 workers. 

In the past year, the company has closed more than 10 subsidiaries. It hopes to boost the profits of the remaining subsidiaries especially via value-added goods by which the company hopes to remain competitive with rivals, Sommart said. 

Pan Asia Footwear plans to call a shareholders’ meeting to outline its business restructuring and answer their questions. It has already explained these issues to the Stock Exchange of Thailand in accordance with regulations governing listed firms. However, there may be some shareholders who want the company to clarify various issues to them directly. Pan Asia Footwear hopes to hold such a meeting before its annual general meeting next April, Sommart said. 

Pan Asia Footwear had earlier considered investing in a footwear factory in Cambodia, but the company’s current financial status and business restructuring forced that project to be postponed, he said.