Kingdom still DKSH Asia hub
Region remains key to company's successful growth, CEO says
DKSH sees Asean with Thailand as a key market with a growing middle class; rising demand for higher-quality consumer goods, healthcare products and luxury goods, which also drives demand for industrial goods and equipment; increasing inner-Asian trade; and expanding outsourcing as companies focus on their core competency.
"Already 25 per cent of our top suppliers' gross margin is from Asia. Thailand is the biggest market for DKSH, generating over one-third of sales," Joerg Wolle, president and chief executive officer of the market-expansion service provider, said yesterday.
Sales in Thailand of Bt50.51 billion in the first half of last year accounted for 36.1 per cent of the company's total sales. DKSH employs more than 10,000 specialised staff with 30 distribution centres, 348 business locations, 554 clients and 84,228 customers.
The increase in the minimum wage will raise more consumers into the middle class, Wolle said. Their higher purchasing power will boost DKSH's business, especially consumer goods and healthcare. It is adding costs, however, even though only a small part of the company's workforce benefited from the policy.
Thailand has been relatively calm for the past two years since a new government took over. The company says it continues to have great confidence in the economy.
Established in 1906 on the bank of the Chao Phraya River, today DKSH is one of the country's leading businesses, with sales of nearly Bt90 billion in 2011.
"We have been in this market for more than 100 years and we continue to invest in our people and facilities in Thailand. Our relationship with Thailand and Thai people is the major factor in our success, and we continue to build on this relationship as we grow together," he said.
DKSH's investment has led to numerous benefits for consumers with regards to the healthcare and consumer goods markets.
The firm's economies of scale and strong presence result in a wider range of products, broader coverage and faster deliveries with cost efficiencies, the CEO said. The company believes it has made lives more convenient for consumers and given them greater consumption choices.
"Most recent proof points of our strong commitment to Thailand are the major investments we are doing on a continuous basis.
"From 2007-09, we opened Thailand's most modern and largest distribution centres for fast-moving consumer goods and healthcare plus the country's most advanced cold chain distribution centre," Wolle said.
"These new distribution centres serve not only as catalysts for further growth of DKSH in Thailand but also as a basis to offer our clients the highest level of logistics and distribution services."
DKSH has also spent more than Bt500 million in building offices called Fantree 3 for its healthcare business unit and Fantree 4 for its technology business unit. These offices employ some 2,000 back-office staff.
Bruno Sidler recently became the company's first chief operating officer with the responsibility to manage all business units and further optimise the business model.
Wolle said DKSH would benefit from Sidler's decades of specialist expertise and outstanding competence in the logistics industry. This applies specifically to the interfaces between DKSH's business model, which is focused on sales and marketing, and the capillary distribution of products throughout the Asia region. But generally it also applies to the business-services industry as an outsourcing partner for multinational and medium-sized manufacturers.
Sidler's long and extensive experience in Asia, coupled with his Swiss roots, makes him predestined to be an ideal complement and asset for DKSH's group management team, Wolle said.