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Published on December 17, 2007

Korean electronics giant Samsung will next year spend as much as Bt100 million to increase manufacture of liquid-crystal-display television sets at its Sri Racha plant.

It will transfer the manufacture of some air-conditioners and washing machines to Si Racha from Suzhou in Jiangsu, China, too.

Thai Samsung Electronics managing director Kwang Kee-park said the company would next year spend between US$2.5 million (Bt84 million) and $3 million on the factory.

He said about $500,000 was earmarked for boosting output of air-conditioners at Si Racha from 240,000 to 400,000.

The company will increase production of liquid-crystal-display televisions from the current 2.5 million sets to 4 million too.

"Our manufacturing facility in Suzhou has lost competitiveness in labour costs, and we decided to relocate some production from there to other facilities in Southeast Asia, including Thailand," Park said.

Samsung will not close the Suzhou plant. It supplies electronics locally as well as internationally, Park said.

Park said that in Thailand the company offset labour costs with an "efficiency-development programme".

The 19-year-old Sri Racha plant is the company's most efficient in the region in terms of skill. It makes "flagship" products including televisions, computer monitors, washing machines, refrigerators, air-conditioners and microwave ovens.

Park said about 65 per cent of total production was exported. The company is Thailand's largest single electronics exporter.

This year Samsung recorded more than Bt46 billion in sales from its Si Racha factory.

"Thailand is one of seven strategic countries Samsung has special focus on. The Thai electronics market is regarded as key, and with the Si Racha factory, Thailand is a regional production hub.

"As the base for Samsung electrical appliances for export to 108 countries, the value of products manufactured at Sri Racha is Bt46 billion in 2007; Bt33 billion for export and Bt13 billion for the domestic market.

"With the higher calibre of the Thai facilities than in many other countries, Samsung is confident the Thai facilities have the potential to be promoted as a key production hub for electrical appliances in the world," Park said.

He said Samsung spent heavily in research and development in Thailand. The Sri Racha factory is the company's first research-and-development centre in Southeast Asia, employing more than 120 engineers.

The company spends heavily on production standards and quality control, including the "chamber", where temperature and conditions can be adjusted in a variety of ways for product-testing ahead of manufacture and sale.

The entire factory cost more than Bt4 billion. It employs 2,400 people in six separate buildings on a 35-rai plot.

Company deputy managing director Arnut Changtrakul said Samsung expected to end 2007 with total sales of Bt17.95 billion, a 23-per-cent increase year on year.

Samsung estimates this year's results will show robust year-on-year growth in all four business areas.

It thinks audio-visual products will grow more than 27 per cent and home appliances 32 per cent while the overall market in this segment will experience a 2-per-cent decline.

In information technology, sales will increase 6 per cent, including a 15-per-cent rise in computer monitors and a 40-per-cent hike in sales of laser printers.

Telecommunications-equipment sales will rise 20 per cent.

Kwanchai Rungfapaisarn

The Nation