US-BASED Emerson will continue upgrading its air-conditioning manufacturing facilities in Thailand to support its growth plan for the whole Asian region.
Hakan Erdamar, president for Asia, Middle East and Africa at Emerson Commercial and Residential Solutions, said Asia is now the second largest market for Emerson, contributing about 24 per cent of the company’s total revenue.
The region is behind only North America, which contributes about 54 per cent, but is posting single-digit annual growth.
“Enjoying double-digit growth annually, we expect Asia’s revenue contribution to increase significantly to 35 per cent in the next five to 10 years,” he said.
Emerson has invested more than US$10 million (Bt331 million) this year to upgrade its compressor plant in Rayong through the introduction of more automation and some high IP (intellectual property) technologies.
Thailand is the source for the Middle East and the rest of Southeast Asia.
“The key things are that Thailand has good protection of intellectual properties and a stable workforce with a competitive cost of labour. The labourers in Thailand are well educated,” he said.
The country also has good laws and regulations as well as infrastructure.
Emerson has been manufacturing in Thailand for almost 20 years. Besides the Rayong plant, the company also had a factory in Prachin Buri for fusites.
Emerson operates some 10 plants in Asia, including three compressor facilities in China, Thailand and India.
“The air-conditioning market has enjoyed annual single-digit growth of 6-10 per cent in Southeast Asia, compared to less than 5 per cent in Europe and America.
“Southeast Asia is the company’s fastest growing market,” he said.
The air-conditioning market has also enjoyed double-digit growth in China and close to double-digit growth in India.
The growth of the air-conditioning market in Asia is driven by many new construction projects within the region, especially in China, focusing on the commercial segment, such as convenience stores and supermarkets.
In most developed markets, consumers are highly concerned about food safety and want to be ensured that all food being provided at retail stores are safe for them.
For the residential segment, consumers today demand nicer, more comfortable and greener air-conditioners.
Emerson’s strategy for Asia is to strengthen its local manufacturing facilities to serve local customers in Asia from the region.
The company also wants to provide food service solutions, including cold chain systems and food safety to its customers all the way from farm to fork, as well as comfort solutions to customers at home.
John Heo, vice president for Southeast Asia, said the overall air-conditioning market in Thailand was slowing down this year because of the cool summer.
However, the original equipment manufacturing business had enjoyed high single-digit growth this year due to higher exports to many markets, such as the Middle East, Latin America, Australia and New Zealand.
Emerson had promoted the Bangkok office as its hub for Southeast Asia, thanks to the high quality and relatively competitive cost of labour.
“Thailand has the best infrastructure among countries in Southeast Asia. The country is also the biggest and well-developed market for air-conditioning in Southeast Asia.
“The Thai government has provided a very good incentive programme to attract foreign investors,” he added.