RIT, LEFT, and Liew expect sales of Bt250 million in the first year.

The move is part of TTi Group’s plans to penetrate the wider Indochina market.

The joint venture is A&M Electric Tools (Thailand) Ltd, in which A& holds 51 per cent and TTi the remainder. Registered capital is Bt1 million, according to Rit Olaricksiri, managing director of the new company.

During the first year of operation in Thailand, the company will introduce four of its 10 brands: AEG power tools and outdoor power equipment for light use, Milwaukee heavy-duty power tools and outdoor power equipment, Homelite equipment for decorating gardens and Vax floor-care products.

AEG and Milwaukee are for professional use, Homelite and Vax for household use. Prices for AEG range from Bt800-Bt5,000, Milwaukee Bt2,500-Bt10,000, Homelite Bt2,000-Bt8,000 and Vax Bt900-Bt12,000.

AEG has already gained recognition in Thailand because it was introduced here 20 years ago by another distributor. Therefore it will be easy for A & M Electric Tools to build brand awareness of the three other lines by referring to AEG.

Another reason to enter Thailand is the market size of the business, currently Bt15 billion, of which 80 per cent is equipment for professional use, the remainder for household use. Market growth is 10-12 per cent annually.

The Thai government’s plan to launch mega-projects in the near future was also a factor in the decision. Rit said that that if the mega-projects began, they would significantly drive sales of the company as all its brands had long been recognized by the international companies involved in the projects.

After it builds a strong brand foundation in Thailand, the company will further penetrate Burma, Indonesia, Laos and Vietnam. Following that push, China will be its next target.

TTi has six factories in Europe, North America and China. Power tools and outdoor power equipment make up 78 per cent of its sales, floor-care appliances 19 per cent and laser and electronic products 3 per cent.

Its sales last year were Bt120 billion, 74 per cent from North America, 26 per cent from Europe, Oceania and Asia. The company expects to balance sales proportion among the three continents soon by aggressive work in Indochina and other regions of Asia, said David Liew, regional general manager for the Asia Pacific Region of A&M Electric Tools (Malaysia) Sdn Bhd.

To build a strong business in Thailand, the company has allocated Bt50 million as a marketing budget. The distribution channels for AEG and Milwaukee are 40 major dealers in Bangkok and about 100 dealers nationwide. Distribution channels for Homelite and Vax are discount, furniture and department stores.

The company expects Bt250 million in sales in the first year.

Nitida Asawanipont

The Nation