Painting with a more diversified palette

Painting with a more diversified palette

Nattavuth Tangkaravakoon talks about TOA's push into car sales and shopping malls.

Mr Nattavuth says overseas partnerships have equipped TOAVH with business strengths in many aspects, including new markets, diversification and expansion.
Mr Nattavuth says overseas partnerships have equipped TOAVH with business strengths in many aspects, including new markets, diversification and expansion.

The Tangkaravakoon family is well known in local business circles for TOA Paint Thailand, a maker and distributor of decorative paint and coating products founded by married couple Prachak and Laor Tangkaravakoon.

The pair started the family business in 1964 by importing paint from Japan before setting up two factories in Samut Prakan in 1972 and 1989 and expanding business operations across Southeast Asia, including Malaysia, Vietnam, Laos, Myanmar and Cambodia.

With a 56-year foothold, TOA Paint restructured the business for listing on the stock market in 2017. TOA Group Holding Co is the largest shareholder, with a 30% stake, and the family members own a combined 45% stake.

The couple have four descendants who are now executives of both TOA and non-TOA segments.

Meanwhile, TOA Group has TOA Venture Holding Co (TOAVH) to oversee other paint and coating products for the automotive and industrial sectors, and it's also diversifying into new business units under the leadership of Nattavuth Tangkaravakoon, the third son of the couple.

"My big brother (Vonnarat) is overseeing Phelps Dodge International Thailand, the manufacturer of wire and cable, and my elder brother (Jatuphat) is in charge of TOA Paint and the sugar business," says Mr Nattavuth, 45. "My youngest sister (Busatree) is managing the real estate business."

Know-how via partners

Mr Nattavuth, who goes by Art, says TOAVH was founded in 2015 by gathering joint ventures of TOA Group and spinning off the decorative paint and coatings segment, which is related to the property and construction sectors.

He says his father began the business without know-how, seeking expertise from other companies to invest together.

At present, TOAVH has four business units, including 18 joint ventures and subsidiaries in industrial paint and auto parts; chemicals; car dealerships; and property development.

"Paint is everything -- both decoration and protection," Mr Nattavuth says.

TOAVH has many overseas partners in joint ventures such as Shinto Paint for automotive, Chugoku Paints for marine and Union Paints for wood.

"We have partnered with Shinto for 30 years, and this Japanese company has expertise in auto paints, so painting of pickup trucks and chassis produced in Thailand is from this venture," Mr Nattavuth says. "Chugoku also comes from Japan with knowledge of heavy-duty and marine paints, so rope bridges, power plants and refineries need heavy-duty products for protection."

He says TOA Performance Coating Corporation originally made emery paper and still does, along with industrial paints, car coatings and conveyor belts.

"This is the only emery paper factory left in Thailand, and 60% of the output goes for overseas shipment," Mr Nattavuth says.

At present, 46% of TOAVH's revenue comes from industrial paint and auto parts, while 11% stems from chemicals (Sherwood Corporation Thailand) and property development (Don Quijote mall).

The remaining 43% is from car dealerships for Suzuki, MG and Mercedes-Benz.

TOAVH achieved revenue of 10.02 billion baht in 2019 and spent 816 million baht for new and existing projects for the four business units.

"We expect 31% growth to 13.13 billion baht this year," Mr Nattavuth says.

Auto optimism

TOAVH became the local car dealer for Suzuki in 2009, when the brand entered the Thai market in the eco-car segment.

"We have sold roughly 20,000 Suzuki cars in the past decade from three branches in Chon Buri," Mr Nattavuth says. "Then we began as the dealer of MG cars in 2014 with nine branches: three each in Bangkok, Chon Buri and Chiang Mai."

He says the 10th MG showroom and service centre at Amata City Chonburi will open in 2020.

TOAVH is also entering the premium car segment as a Mercedes-Benz dealer with an investment worth 1.1 billion baht.

MG and Suzuki combined made 4,165 deliveries in 2019, while Mercedes-Benz will begin sales in 2020.

"The luxury car segment will help TOAVH's revenue this year, as we expect to sell 6,440 cars in total," Mr Nattavuth says. The MG facility targets 4,200 deliveries in 2020, followed by Suzuki with 1,640 and Mercedes-Benz with 600.

"The Thai car market is facing many difficulties from the economic sentiment, but TOAVH is optimistic about business opportunities," he says. "We began with Primus Autohaus Mercedes-Benz and a new MG branch, so car sales in 2020 will grow significantly because TOAVH started from zero."

TOAVH now covers many vehicle segments -- eco-cars, sedans, SUVs and luxury cars -- and sees room for future growth.

"We expect sales volume of 9,000 cars by 2025 and revenue from the automotive dealership business to reach 9 billion baht," Mr Nattavuth says.

No neutral strategy

Doing business cannot stay calm for long, and every movement will have an outcome. This is Mr Nattavuth's mindset as he administrates TOAVH.

"If you plan to reduce operating cost and increase sales, your fixed cost will decrease," he says. "If you expand production capacity, you can buy cheaper raw materials. TOAVH always seeks new opportunities and tries to learn from them."

Running the Don Quijote mall, known as Donki Mall Thonglor, is a new experience for TOAVH.

The company formed two joint ventures for Donki in Thailand and partnered with Pan Pacific International Holdings Pte Ltd, Don Quijote Group's Singapore-based holding company for overseas operations.

"We have gathered each strength from our partners to position the Donki Mall in Thailand as the best retail experience, and that is why we chose the Thong Lor area for the first branch," Mr Nattavuth says. "The Donki Mall is a 24/7 discount store from Japan, and we have to make this mall attract buyers at all operating times, similar to the more than 300 branches in Japan."

He says overseas partnerships have equipped TOAVH with business strengths in many aspects, including new markets, diversification and expansion.

"These strategies are what my father did over 50 years ago, and I have learned from actual situations and problems such as beginning paint manufacturing in Malaysia, exploring business potential in Vietnam or starting to sell emery paper in Bangladesh," Mr Nattavuth says. "Doing business means having a good system, practical tools and ownership that can handle risks and obstacles."

He says the coin has two sides: "Once we face many economic difficulties, we may feel a pinch to avoid suffering, but if we think of potential room for growth and opportunities, we will be more confident and ready."

TOA Group has endured many economic recessions, such as the financial crises of 1997 and 2009, but it cleared those hurdles, Mr Nattavuth says.

He says his father and siblings were challenged in 1997 because TOA had overseas lending and the baht fell sharply against the US dollar.

"I was a first-jobber at the time and worked with a steel company of the Horungruang family when the steel business also collapsed from the 1997 crisis," Mr Nattavuth says. "I went back to help my family business, then I went abroad for master's degree studies four years later, when TOA Group resumed in a better situation."

With their work and life experiences, businessmen have to foresee what happens next, he says, so they can anticipate trouble and keep calm amid unexpected risks.


BIO DATA

Nattavuth Tangkaravakoon
Age: 45


EDUCATION
- Bachelor of Engineering, Chulalongkorn University
- Master of Science, engineering management, University of Southern California

CAREER
- 2019-present: Director, TPM Paint Malaysia Sdn Bhd
- 2019-present: Director, Chugoku-TOA Paint Myanmar
- 2018-present: President, Primus Autohaus Co
- 2017-present: Director, JCE-TOA Co
- 2017-present: Director, TOA-PPIH Co
- 2016-present: President, iTOA Auto Sales Co
- 2016-present: President, Best Auto Sales Co
- 2016-present: Director, Shinto TOA Vietnam Co
- 2016-present: President, TOA Venture Holding Co

FAMILY
- Married with three daughters

HOBBIES
- Golf, running


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