SATURDAY, March 02, 2024

Stiebel Eltron eyes Thailand as manufacturing hub for region, Down Under

Stiebel Eltron eyes Thailand as manufacturing hub for region, Down Under

Stiebel Eltron, German manufacturer of heating appliances, has announced plans to expand its manufacturing facilities in Thailand to serve as a hub for ASEAN as well as Australia and New Zealand.

Roland Hoehn, managing director of the company’s Asian operations, told the press on Monday that the expanded facility will focus on producing heat pumps.

Demand for Stiebel Eltron’s eco-friendly heat pump technology has picked up in Europe as people are moving away from the use of gas and oil to generate heat due to concerns over climate change.

“Our heat pump manufacturing facilities are currently located primarily in Germany and Sweden. However, due to the increased demand in this region, particularly in Australia and New Zealand, we have considered establishing a second facility in Thailand to meet the demand,” Hoehn said.

Stiebel Eltron’s heat pumps use energy generated by the air to produce hot water, making them ideal for countries where heating is required, he said.

He added that since the company already has a manufacturing facility in Ayutthaya, adding a new production line will be easier and faster. The company entered Thailand in 2006.

However, he said, the plan is still in its early stages and reckons the new line will be available in the market within the next three years.

“We are looking for a suitable location. We are also debating whether the new plant should be rented long-term or purchased outright. If purchased, it may cost around 100 million baht, but half the price if rented,” he said.

This initiative is also part of Stiebel Eltron’s strategy for 2023, which includes the introduction of renewable energy products like air ventilators and heat pumps.

Hoehn added that Thailand’s economic recovery has also prompted Stiebel Eltron to boost its production capacity. He said the company recently set up a subsidiary in Vietnam and plans to use its 20 years of experience in Thailand to penetrate the neighbouring country’s growing market.

Stiebel Eltron eyes Thailand as manufacturing hub for region, Down Under

This strategy was devised after the company announced a better-than-expected performance in the first 10 months of this year.

He said the company’s domestic sales performance for the first 10 months has risen by 12% versus the same period last year.

"We are targeting the C-segment customer group this year with the launch of the Safe Save Series 2 campaign. This will help boost our Q4 water heater unit sales by 25%,” he explained.

The C-segment refers to middle-income groups who are willing to spend up to 3,500 baht on a product.

Vijitra Kaweetanapokin, Stiebel Eltron's sales and managing director, said more than 300,000 Stiebel Eltron water solutions units have been sold in Thailand so far. Water heaters are still the company's main product, accounting for roughly 70% of total sales.

“We are confident in our ability to maintain our position as the market leader in water heaters in Thailand. We expect the B2C [business to consumers] and B2B [business to business] sales to jump by 15% by the end of next year,” she said.

Steibel Eltron has nearly 100 years of experience in environmentally friendly water solutions and employs over 5,400 people worldwide. The company's turnover surpassed 1 billion euros in 2021, with roughly half of that coming from overseas.