Home water-heater firm to boost production

Managing director Roland Hoehn yesterday said the German-based manufacturer would increase its capacity in response to higher demand in Asian markets, to which the company would begin "exporting seriously" in the middle of next year.

The US financial crisis will not directly affect company sales, he said while conceding that the expected recession would see a slump in consumer spending.

However, for Stiebel Entron, the crisis will not affect sales this year or next, because property projects that are already under construction will have to be completed, and about 20 per cent of the company's domestic sales are to such projects. The rest are to end-users and professionals like architects and interior designers.

Hoehn said a world economic recession might force property developers to delay projects after 2010 and that this would then lead to lower consumer spending.

One good thing to come from the crisis is the company's ability to lower its production costs, because of falling prices for raw materials like steel, plastic and copper, which have followed in the wake of declining oil prices, he said.

Stiebel Entron has also diversified its products into related appliances, such as water filters, heat pumps and hand dyers, in a bid to smooth its sales growth.

Hoehn said the company expected its Stiebel Entron brand to become the leader of the electric-water-heater market, both domestically and regionally. In Thailand, Stiebel Entron achieved a 30-per-cent market share last year, with sales of 330,000 units worth Bt370 million, up 15 per cent year on year. At present, it is Thailand's largest producer, making 140,000 units a year, and the second-largest producer in the Southeast Asian/Pacific region.

Sales are expected to reach Bt450 million this year, Bt350 million of which will come from the domestic market and the rest from exports.

"Although economic and political troubles have left the overall economy in a slowdown, we are confident that our sales will remain undisturbed," Hoehn said. "We attribute this to our energy-saving and environmentally friendly models, developed for Thailand and the regional market."

Early next year, Stiebel Entron will launch a new water heater called the IL, the latest under the company's "green innovation" concept, with digital functions, smart memory and sleek design. The new product will target modern families who value functionality, Hoehn said.

Exports of the new IL model will begin in the middle of next year. Stiebel Entron's export markets include Hong Kong, the Philippines, Indonesia, Korea, China, Vietnam, Sri Lanka, Singapore, Cambodia, Laos, Malaysia, South Africa and Australia.