Chief executive director Thaksa Busayapoka yesterday said that about 10 years ago, exports contributed 10 per cent of the company's income. But the figure has fallen to 5 per cent because Modernform cannot compete with cheap furniture from China in overseas markets.

"We will return to expand our export markets by focusing on premium products with chic designs that will be different from our competitors - especially those from China that target only cheaper markets," he said. At present, 95 per cent of Modernform Group's revenues come from the local market. Export markets  include Japan, South Asia and the Middle East.

The company recorded revenues of Bt2.7 billion last year, down 12 per cent on 2005, but its 2006 net profit of Bt341.94 million was 6 per cent higher than the previous year.

To enter different markets to those seeking cheaper products, the company is spending Bt20 million per year to design and develop premium products that will stand it apart from competitors.

Modernform has also changed its business model. When its plant is running at full capacity it will turn to partners and outsource production for both export and domestic markets. "Furniture is fashion with rapid changes," Thaksa said. "Therefore we prefer to seek more partners and outsourcers rather than purchasing our own machines or building new plants."

At present, the company imports 20 per cent of its raw materials and parts. In future it might increase the proportion of imported raw materials and outsource production overseas because domestic production means higher prices.

Modernform is also negotiating a possible joint venture that will boost production capacity as well as increasing distribution channels. However, Thaksa declined to name the prospective partner.

Chalida Ekvitthayavechnukul

The Nation