firm doubles capacity at nivea factory

Beiersdorf has invested about ¤10 million (Bt478 million) in doubling capacity at its Nivea plant to cope with growth in exports following free-trade pacts with Asean and Australia.

Ralph Gusko, managing director of Beiersdorf (Thailand), said yesterday that despite the economic and political situation, the decision to make Thailand its regional production hub reflected the fact that the country is the German giant's largest market in Southeast Asia and that it had shown constant double-digit growth.

"Beiersdorf considers that we have good operations in Thailand. It is cost-competitive, the quality of production is excellent and we think it is a stable country in the long term," he said.

The capacity increase at the manufacturing facility in Samut Prakan's Bang Phli district is aimed at cashing in on Thailand's skilled and reliable workforce and free-trade agreements with Asean and Australia.

With the additional capacity, the local unit will see its export ratio rise to 80 per cent of production, from 60 per cent at present.

The company's key export markets are Vietnam, Malaysia, the Philippines and Australia, and no new market is in view.

"The factory expansion is meant to fill the demand from these existing markets," Gusko said.

Nivea is now the largest skin and beauty-care brand in Thailand, and the Eucerin brand also clearly occupies pole position in the dermo-cosmetics segment with a share of more than 70 per cent.

The former production facility has reached its limits. The expansion project will double output to 31,000 tonnes per year.

Future phases will allow the factory to turn out up to 60,000 tonnes annually.

Peter Kleinschmidt, a member of Beiersdorf's executive board in Bangkok, said in an earlier interview that the move was a very clear sign of the company's confidence in the Thai and Asian markets.

Beiersdorf aims to keep growing its sales at higher-than-market rates or in other words, keep gaining market share over its competitors.

"What we will continue to do in Thailand is really grow our businesses proportionally.

"We still want to continue growth that is in the double-digit range in Thailand," he said.

Beiersdorf Thailand's sales last year rose by 19.3 per cent to Bt5.71 billion and in the first quarter of this year increased by 13.9 per cent, despite the economic downturn.

Bangkok-based Beiersdorf (Thailand) has 460 employees.