The Nation



East Coast Furnitech targets 15% growth

EAST COAST Furnitech targets growth of 15 per cent in the sales of rubber wood and particleboard next year amid rising demand overseas, especially from Japan, and store expansion.

"The main reason for our continuous growth in revenue is the increasing demand for particleboard and rubber wood, along with effective management of our production costs," Arak Suksawad, managing director of East Coast, said yesterday.

For the first nine months of this year, East Coast earned Bt34.19 million on revenue of Bt853.21 million. The numbers represent a 20.4-per-cent increase from the same period last year.

East Coast expects to sell more furniture in the local market next year after opening two branches under the "a7" brand at Mega Home Centres in Nong Khai and Chon Buri. In other modern retailers, its brands include Muse in Tesco Lotus, Fur Direct in Big C and Leaf in Home Pro. It also operates 11 Elega showrooms inside Index Living Mall outlets.

Orders from Japan, East Coast's biggest foreign market, are expected to increase by 5 per cent due to store expansion by its customers. Demand from the US is picking up because of the economic recovery there but Europe remains weak.

East Coast plans to seek new markets in Asean, the Middle East, India and Africa.

One of the fastest-growing markets in this region is the Philippines. The country does not have furniture-makers and is one of East Coast's best markets in this region. This year, it has sold about Bt3 million worth of furniture to the Philippines and has Bt10 million worth of orders for next year.

East Coast expects to spend Bt60 million next year to open branches, buy new machinery and expand warehouses to cope with the increase in demand. The company predicts a drop in production costs next year, thanks to lower wood prices, which have already fallen by 2-3 per cent due to intensifying competition. With the added machinery, East Coast expects to trim its workforce. It is also planning to install solar panels to save energy costs. With lower production costs, the company expects its profit margin to improve to least 7 per cent next year.

The tense political situation has not hit the company's sales yet because its has an order backlog, and 55 per cent of its business is exports. However, the business climate could change if the conflict turns violent, he added.

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