Tile producer Sosuco hopeful of higher rise in sales next year

Managing director Kittichai Kraikokit said the company would record sales of about Bt5 billion this year, up by about 1 per cent from 2012. Many customers put off plans to renovate their homes after they decided to buy their first car last year to take advantage of a government tax-break programme.

“When people have to pay a monthly instalment for their first car, they have less money for renovations. This has had a direct impact on us, as up to 70 per cent of our domestic customers are from the renovation market,” he said.

The rest of Sosuco’s domestic sales are from property developers with which it has long-term contracts.

Export accounts for about 20 per cent of its total sales, half to Asian markets, and the other half to Africa, Europe, North America and Australia. 

Despite this year’s low growth, the company believes revenue in 2014 will grow by at least 5 per cent if the country’s economy expands by 4-4.5 per cent as some predict. Sosuco also expects to expand its exports to 30 per cent of its sales next year while increasing the number of domestic customers, both in retail and residential-project development. 

It will not raise its prices even though its production costs are being driven up by rising energy expenses. The market is highly competitive from both domestic competitors and imports from China, which offer prices 25-35 per cent lower than Sosuco’s. 

However, the company will maintain growth in its net profit margin by developing its production process to reuse heat. This system helps the company reduce energy costs by an average of Bt2 per square metre of tile production.