Bt3.1 bn carpet business deal approved

The acquisition will allow TCMC to step into the business of one of the world's leading carpet manufacturers and distributors, positioning it for global expansion.
Tai Ping Carpets International's commercial carpet business has a strong distribution network with a presence in markets around the world. It has offices in nine major markets, including Thailand, the United States, Britain, Hong Kong, Singapore, Macau and India.
Tai Ping Carpets International's commercial carpet business consists of Axminster, broadloom tufted and hand-woven rugs for sale to hospitality projects such as hotels, casinos, convention centres, auditoriums and cruise ships, as well as carpet tiles for corporate offices. TCMC executives will fly to Hong Kong on September 28 to close the acquisition deal with Tai Ping Carpets International.
Pimol Srivikorn, chairman of TCM Corporation, said TCMC had been in the carpet manufacturing and distribution business for about 50 years after the two founders, Chalermbhand Srivikorn and Khunying Sasima Srivikorn - who had set up a joint venture with Tai Ping Carpets International - focused on the production of hand-tufted carpets in Thailand at a factory in Don Muang. Tai Ping Carpets International later sold all of its stake in the joint venture to set up its own manufacturing firm, Carpet International Thailand, with an Axminster facility in Pathum Thani. TCMC, however, had the right to use the Tai Ping brand in the Thai market.
“The acquisition will allow TCMC, which changed its name to TCM Corporation, to increase the economies of scale of its manufacturing facilities and to reduce production costs by fully utilising the machinery,” Pimol said.“After the acquisition, the combined manufacturing capacity for the Axminster will reach about 1.5 million square metres per year, up from between 300,000 and 500,000 square metres per year produced by our existing factory in Don Muang alone.”
“By acquiring Tai Ping Carpets International, TCM Corporation will have a projected total sales revenue of more than Bt10 billion for next year, up from the Bt7 billion posted about four years ago.”
He said that after combining the two facilities in Thailand under TCM Corporation, the company would focus on two strategic brands – Royal Thai and Carpets Inter – for, respectively, Axminster and carpet tile products for distribution at home and abroad. The company would stop using the Tai Ping brand. 
The company would also restructure its operations into three major divisions: flooring, furniture and automotive.
William James Palmer, co-chief executive for the flooring business at TCM Corporation , said he was delighted to be part of the company after moving across from Tai Ping. “With the extensive manufacturing and strong marketing channels that we have built for more than 20 years, this will help promoting the company's Royal Thai brand to be recognised globally, and help strengthen TCM Corporation to grow steadily in the next step,” Palmer said.
He said that the global market for Axminster carpets is about US$650 million, though it has been flat over the past five years. Of the total market, about $300 million is in the US, $150 million in Europe and $200 million in Asia. After the acquisition, TCM Corporation would have between 25 per cent and 27 per cent of the global Axminster market.
Mark Robert Johnson, co-chief executive of the flooring business at TCM Corporation and formerly of the Tai Ping carpet business, said that he hoped to see the further development of the production process after the merger, as it will make TCM Corporation the world's largest seller of Axminster carpets.
He expects the production capacity for Axminster, hand-tufted and carpet tile manufacturing will increase by a magnitude of several times, driving efficiencies in production and the use of resources.