Pranda sees lustrous rebound
published : 21 Apr 2017 at 04:00
newspaper section: Business
writer: Pitsinee Jitpleecheep
After two years of losses, Pranda Jewellery Plc, the manufacturer of gold and silver jewellery, expects to make a business turnaround this year.
Chief executive Pranee Khunprasert said rising orders from the US and a market recovery in Europe made the company's sales in the first quarter of this year grow by 40% year-on-year.
Sales from the US and Europe contribute 70-75% of the company's total exports under original equipment manufacturer (OEM) contracts.
Pranda has also adjusted its business strategy, seeking more opportunities to produce gold and silver jewellery products for new luxury jewellery brands in various countries rather than relying mostly on existing OEM clients as in the past.
The company will also produce more limited jewellery editions with higher prices.
Through these efforts, Prada aims for its balance sheet to return to black this year, said Ms Pranee.
Last year, the company posted a net loss of 283 million baht on revenue totalling 2.91 billion, compared with a net loss of 55.7 million and revenue of 2.93 billion in 2015.
Decha Nuntana, the company's deputy managing director, said Pranda is negotiating with a couple of strategic partners in the European market for co-developing, sourcing materials and producing gold and silver jewellery to supply them.
Negotiations are expected to conclude this year. Currently, the company produces silver and gold jewellery for over 20 international luxury jewellery brands to reduce business risks.
"Consumer purchasing power in the US has revived since the fourth quarter of last year. US President Donald Trump's policy to reduce the personal income tax has encouraged American people to spend more. We don't see any effects coming from this policy," said Mr Decha.
The company also plan to spend 48 million baht to expand its business this year, 10 million baht of which will be used to open seven Prima Gold shops in leading department stores.
The company expects to increase sales by 20% to 3.4 billion baht from 2.83 billion last year. About 70% of those sales are projected to come from the OEM business and the rest from retail sales. It has its own brands including Prima Gold, Prima Art and Prima Dimond in the domestic market.
Currently, Pranda has jewellery manufacturing facilities in Thailand, Vietnam and Indonesia. In Thailand, its factory has a maximum capacity of 10 million pieces per year.
Kasikorn Research projects total shipments of gems and jewellery (excluding gold) to the US market could reach US$1.29-1.32 billion this year, representing a 3-5% rise from 2016.
This projection is based on improving retail sales of jewellery, as well as an assumption that gold and silver prices have passed their lowest point, although prospects of substantial increases are not very likely.
PRANDA shares yesterday closed on the Stock Exchange of Thailand at 4.18 baht, up four satang, in trade worth 2.69 million baht.