Singer Thailand Plc is making a major diversification to become a distributor of goods produced by other Asean countries while expanding its lines into pest control and electrical appliance repairs.
Boonyong: Seeking Asean brands
As the appliance market becomes more intense with many brands, the company has been forced to diversify from hire-purchase to grab new opportunities, particularly with Asean becoming a single market in 2016.
Managing director Boonyong Tansakul said the company's first subsidiary, Singer Leasing, will be set up soon with registered capital of 850 million baht to handle leasing for appliances and other products.
Singer Leasing will initially focus on agricultural products and equipment for small and medium-sized enterprises.
"The Pheu Thai government places importance on farm products and farmers, so Singer expects the agriculture business will be more important and many measures launched to support this sector," said Mr Boonyong.
The subsidiary will also focus on leasing for pickup trucks, which are used in farming.
Singer in Sri Lanka has already tested this business model, which was well received by customers.
A second subsidiary, Singer Service Plus, will be set up to provide home services, starting with appliance repairs for customers in residential projects, hotels and offices.
"Within the next three years, we expect to provide integrated home services, from electrical appliances to sewage systems and termite elimination," said Mr Boonyong.
Singer Thailand will focus on the retail business, looking after sales of Singer appliances through general dealers.
About 95% of Singer's overall sales come from hire-purchase, with the remainder from retail business. Under the new structure, the company expects its retail sales proportion to increase to 30%.
Apart from selling its products to dealers, Singer Thailand will also become the distributor of other products.
"When the Asean Economic Community kicks off in 2016, more foreign appliance brands are expected to explore opportunities in our country. Such firms may need local distributors. It will be a new chance for Singer, which has been in the Thai market for more than 100 years," Mr Boonyong said.
The company is negotiating with three or four Asean appliance brands to distribute their products in Thailand.
With more convenience stores to be opened here, the company will also distribute machines used in such stores.
Mr Boonyong said the company expects sales growth of 25% to almost 3 billion baht this year, reaching 5 billion annually within the next five years.
The company will add Singer air conditioners to the market this year.
It also uses a neutral body to manage debts, resulting in lower bad debts.
Singer posted a net profit of 142 million baht in 2011. For just the first nine months of last year, net profit was 184 million baht.