Wacoal mulls Thailand exit
Keeping abreast of Myanmar market
ICC International Plc, the distributor of Wacoal lingerie, is looking into establishing a production base in neighbouring countries in the near future to resolve labour and wage problems in Thailand.
Thammarat Chokwatana, a director and executive vice-president, said the parent firm Saha Group is conducting a feasibility study into moving Wacoal production to Myanmar, Laos or Cambodia.
Such a move move would also see production capacity expanded to cash in on the huge regional purchasing power after implementation of the Asean Economic Community in 2015.
Mr Thammarat said two options are available. One is setting up a lingerie factory within the compound of a possible future Saha Group industrial park to be build in a neighbouring country.
The other is a stand-alone plant for Wacoal.
Most Saha Group products are labour-intensive, so it is necessary to look for new locations that can lower production costs and make the products more competitive, he said.
The group will decide on the best option by next year.
The company has already opened a new factory in Tak's Mae Sot district bordering Myanmar in a bid to resolve problems with labour shortages and rising wages.
Regardless of the location, the goal will be to support the group's expansion in Myanmar, where sales have shown continous growth each year.
That country will contribute revenue of 100 million baht this year, with the figure expected to double next year.
Wacoal lingerie is now manufactured at four Thai factories, in Bangkok, Chon Buri's Si Racha district, Prachin Buri's Kabin Buri district and Lamphun province.
The brand generated sales of 2.8 billion baht last year, projected to rise to 3 billion this year.
To this end, the company is spending 30-50 million baht on a new marketing campaign called "Wacoal Must-Haves" that runs until Aug 31.
Customers purchasing four items of Wacoal lingerie will have a chance to win an international or domestic holiday and other prizes.
The company expects the campaign will help to boost sales by 20%.
The total value of Thailand's lingerie products sold in department stores is 5-6 billion baht with a 10% annual growth rate.
Mr Thammarat said the healthy growth rate is due to new products from new producers and aggressive marketing activities by existing brands.
Wacoal commands a 50-60% market share, followed by Sabina and Triumph at 12-13% each.
Mr Thammarat said shopping sentiment was not good in the first five months of this year, as customers had other priorities.
However, sales by ICC International Cosmetic Co is expected to grow by 30-40% to 15 billion baht this year.
By Pitsinee Jitpleecheep
21 June 2012
Thammarat Chokwatana (left), an executive vice-president of ICC International Plc, promotes the ‘Wacoal Must-Haves’ lingerie campaign among Thai women.The company expects the campaign will help to boost sales by 20%.