Building on the local and regional success of the K-Block brand of lightweight construction materials, Surapol Ruksarnukul, managing director of Phoenix SDS Co, plans to target the Middle Eastern and European markets this year and next.
K-Block is a high-quality material in block form, suitable for use in residential properties, that achieves it lightness thanks to an original chemical formula that leaves air pockets in the blocks, Surapol said.
The company has developed its own machinery to produce the lightweight blocks. The machinery is sold to franchise outlets, which make and distribute the blocks.
The franchise system was launched four years ago in the domestic market. There are now seven franchisees nationwide, including in Bangkok, Pattaya and the South. The company also has franchise outlets in Cambodia, Indonesia and Nepal.
After launching its technology at the Architect 2010 expo in April, the company has received expressions of interest from potential franchisees in Malaysia, Saudi Arabia and Iraq.
"We are a small to medium-sized firm, so when it comes to expansion, we don't have a huge investment budget. Our business strategy focuses on creating partnerships and selling our technology to build our brand and market. The franchise system is the best way to expand our business," he said.
Franchisees require an investment budget of about Bt6 million: Bt4 million to set up a production facility, and Bt2 million to buy raw materials from Phoenix SDS. The small plants typically have production capacity of between 50,000 and 100,000 blocks a month. The blocks are priced at about Bt19 per block. Franchisees usually take about one year to a year and a half to generate enough income to cover their investment.
Surapol said demand for lightweight blocks to build residences is rising as property developers look for new technologies to allow faster and better-quality construction than traditional methods.
Phoenix SDS' own K-Block manufacturing plant in Rayong has a production capacity of 200,000 blocks a month.
Surapol said he established the K-block business eight years ago after achieving success with his trading firm Taurus Pozzolans, which deals in fly-ash, a by-product of coal-powered plants that is used as a raw material in concrete.
Surapol established Taurus Pozzolans after the economic crisis in 1997.
At that time, there were few market players with the knowhow to market fly-ash as a material that could be mixed with cement to make concrete, he said.
After four or five years, the competition began to increase, and the company began looking for a way to create value-addition from fly-ash. The search led it to the formula for a lightweight building material in block form that was of sufficient quality to be used in building residential properties, and which had few peers in the market.
Surapol, who is also managing director of Taurus Pozzolans, said the company's business plan is to develop other products along the same lines, including roofing materials.
"Our business strategy is to expand step-by-step, building on our experience. Our strengths are our ability to independently research and develop new technologies ourselves," he said.
Currently, the group, comprising Phoenix SDS and Taurus Pozzolans, generates total revenue of more than Bt100 million a year. The group also expects average growth of 10 per cent a year.