Singer looking to acquire vending machine makers upcountry to boost revenue
Listed company Singer Thailand is considering acquiring vending-machine producers upcountry to help resume annual sales-revenue growth of 20 per cent, chief executive officer Boonyong Tansakul has said.
Boonyong said revenue growth this year had dropped to 10 per cent from effects of the economic slowdown. However, lending by its wholly owned subsidiary Singer Leasing (Thailand) is expected to grow by 15 per cent to Bt3.1 billion this year as the company has focused on leasing commercial products such as vending machines to traditional stores.
Singer’s customer base is upcountry, and its non-performing loans rose since the end of last year because of the delayed payments to farmers under the rice-subsidy programme. Farmers account for 25 per cent of the business’ 175,000 borrowers.
The company had enjoyed annual sales-revenue growth of 20 per cent in the past four or five years.
Singer Thailand has not established franchises in neighbouring countries because its parent company is taking care of that. Recently Singer Group set up Singer Cambodia to operate a lease-to-own business.
Boonyong said the parent company asked the Thai unit to study ways to accelerate growth again, and mergers and acquisitions could be a solution.
“We appointed financial advisers to study the model of inorganic growth,” he said, adding that acquiring vending-machine manufacturers upcountry seemed a possibility.
Despite the economic slowdown, vending-machine sales upcountry have grown sharply, while Singer Thailand does not have a manufacturing base. If it owned a factory, it could supply vending machines to Singer in Cambodia and to vendors in Myanmar and Laos.
Negotiations with local vending machine manufacturers are tipped to be completed early next year. The company has set an initial budget of Bt200 million to Bt400 million to acquire such businesses.
The company might issue a private placement or pay cash to acquire businesses.
Boonyong said the company expected its sales revenue to return to 20-per-cent growth next year using the M&A route.
Recently, Singer Leasing partnered with Sun108, a business unit of Saha Group that sells vending machines, to provide instalment plans to Sun108 customers.
He said the company would focus more on offering leasing to dealers of multiple home-appliance brands apart from offering leasing for Singer products only.
Around 500 of its 175,000 borrowers are buyers of other brands, and these are a new customer segment who can pay instalments at non-Singer collection channels such as banks. However, most borrowers prefer to pay their debts to the Singer team.
He said the company was looking into financing purchases of pickup trucks, and it had kicked off a pilot project by offering instalment plans to 150 Singer staff.
“We have to spend time studying the appropriate debt-collection system to ensure this [pickup-truck financing] will not hurt us,” he said.
The auto-loan situation in the country is not improving yet, so Singer Leasing will be cautious about getting into this segment, Boonyong said.
Singer Leasing has sufficient funds to finance pickup trucks and vending machine purchases because its board recently approved a debenture issue amounting to Bt3 billion. Singer Leasing issued debentures worth Bt300 million, keeping the remaining Bt2.7 billion to issue additional bonds.
