Sittiwat Sahawat, assistant marketing director of Woodtek International, the marketing arm of Vanachai Group, said yesterday that the company expected the new brand to generate Bt400 million in sales from the domestic market and Bt200 million in exports.

Vanatur features high-density fibreboard (HDF), where the wood is crushed completely into pieces of fibre, mixed with resin and compressed with high heat and pressure. Paraffin finishing is added to withstand intense pressure and humidity and an overlaying film applied to prevent scratches.

Woodtek started marketing Vanatur last year and reached Bt200 million in sales by December, half of which was contributed from being an original equipment manufacturer (OEM), 30 per cent by direct approach to housing projects and the remainder from selling to end-users through dealers and modern trade channels.

Sittiwat said Woodtek expected to increase its proportion of sales gained from end-users to 30 per cent and reduce the proportion from its direct approach to housing projects to 20 per cent. But it still wants it dealers to maintain strong bonds with developers of housing projects.

Sittiwat said the laminated-wood market had a bright future because consumers' awareness about the product has improved in the past two years and the price has been lowered to an acceptable level.

The highest price for eight-millimetre-thick panels, for example, used to be Bt1,200 to Bt1,500 per square meter (including installation fee) while current prices range from Bt400 for Chinese products to Bt800 for European products and Bt600 for Vanatur.

To build marketing awareness of the Vanatur brand, Woodtek has allocated 10 per cent of its expected domestic sales to a marketing budget. The company expects to increase its dealers from 12 to 30 by the end of the year.

For its export plan, the company will put a higher concentration on the Middle East, particularly Dubai, due to the booming property industry there. It also has markets in Vietnam, India and China.

In the competitive atmosphere of the domestic market, Sittiwat does not expect to see a fierce price war like last year because the prices are already down to a level that cannot be lowered anymore. There is also the problem of cheap imports from China. Hence, the competition this year is expected to focus on quality.

Sittiwat said annual consumption of laminated wood in Thailand was low, at 3 million square metres only. Global consumption is 270 million square metres.

Vanatur's current maximum production capacity is 1.4 million square metres, but production last year was 250,000 square metres. It currently is an OEM for three companies and is negotiating with a few more.

Meanwhile, Vanachai Group is considering a plan to expand the capacity of its Bt300-million plant in Rayong to manufacture the glue that links boards.

Vanachai Group expects revenue of Bt7.5 billion this year, a 14-per-cent rise from Bt6.6 billion last year.

Nitida Asawanipont

The Nation