TCMC buys 75% stake in UK furniture maker

TCMC buys 75% stake in UK furniture maker

DM Midlands plans to open plant in region

From left, TCMC executive director M.L. Walliwan Varavarn, TCMC chairman Pimol Srivikorn, DM Midlands chief executive David Lee, and DM Midlands design director Mark Smith attend the acquisition signing for the furniture firm.
From left, TCMC executive director M.L. Walliwan Varavarn, TCMC chairman Pimol Srivikorn, DM Midlands chief executive David Lee, and DM Midlands design director Mark Smith attend the acquisition signing for the furniture firm.

SET-listed Thailand Carpet Manufacturing Plc (TCMC), a leading carpet manufacturer under the Tai Ping and Royal Thai brands, has clinched a deal to acquire a 75% stake in DM Midlands, a furniture group in Britain, for 1.6 billion baht.

After the acquisition, TCMC expects to roll out the English furniture business in the Asia-Pacific market next year.

TCMC chairman Pimol Srivikorn said he was confident in the potential of DM Midlands and its acquisition was a great deal.

The regional furniture market expands at least 6-7% per year and should increase thanks to higher spending on furniture, especially in Thailand and China, he said.

"We found people in Asia-Pacific are fond of home decorations the past few years, so the furniture market has continued to grow," said Mr Pimol.

DM Midlands plans to set up a furniture plant in the region to facilitate market penetration. The price of English furniture will be more competitive made locally while the design is still from the UK.

After acquiring DM Midlands, TCMC expects its total revenue will nearly double to 6 billion baht next year, up from 3.2 billion forecast this year.

Mr Pimol believes the furniture business will complement TCMC's carpet operation.

TCMC expects its merger and acquisition (M&A) strategy will drive sustainable growth. Last year the Thai carpet producer acquired a 76% stake in Alstons, one of the biggest family-owned sofa manufacturers in the UK, for 1.28 billion baht. It bought a 49.9% stake in T.C.H. Suminoe, a Thai automotive fabric and carpet manufacturer, two years ago.

"Our revenue has grown significantly since we implemented the M&A policy two years ago," he said.

Mr Pimol said TCMC will also look to acquire furniture-related business overseas, particularly in the US. Its acquisition criteria is a shared business direction and values.

DM Midlands had been interested in expanding its presence to Southeast Asia to enable robust growth. The company believes TCMC has great potential to help it expand in the Middle East and other parts of Asia.

David Lee, chief executive and co-founder of DM Midlands, said the company was delighted to sell its stakes to TCMC, which it considers a trusted and strategic partner for the long term.

"TCMC is expected to help strengthen our business growth and support the development in both products and marketing strategies," he said.

Mr Lee said DM Midlands will become a well-known global furniture brand, growing beyond the UK market.

Given its partnership with TCMC, DM Midlands wants to become one of the biggest UK carpet manufacturers in the near future.

During the first half this year, TCMC posted a net profit of 102 million baht on total revenue of 1.69 billion baht.

TCMC shares closed yesterday on the Stock Exchange of Thailand at 4.86 baht, up 10 satang, in trade worth 119 million baht.

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