Unfazed Haier, Midea on track with Thai expansion
Despite the unabated spread of the coronavirus, two giant Chinese air conditioner marketers and manufacturers, Haier and Midea, remain active in their expansion in Thailand.
Thanes Bin-a-sun, chief operting officer of Haier Electrical Appliances Thailand, an arm of Haier Group, said the company has allocated 30 million baht for a marketing campaign to stimulate spending this summer, aiming at growing sales of air conditioner products by 20-30% for the year.
"Overall consumer sentiment is relatively poor since the coronavirus broke out in February," he said. "Sales are expected to significantly drop after malls were ordered temporarily closed from March 22 to April 12, which is considered the peak sales season for air conditioner products."
However, Mr Thanes said with more people staying home and working from home, higher demand for air conditioners is anticipated, helping offset the sales drop from the closure of malls.
"It is fortunate for Haier because about 70-80% of our products are sold via traditional trade [dealers]. We expect sales in the first quarter to grow by 30%," he said.
Mr Thanes said the company is encouraging dealers to sell more products online. About 20% of its 450 dealers across the country sell Haier air conditioners online. The company will send teams to train dealers to expand business via the online platform, he said.
Mr Thanes predicted Thailand's overall air conditioner business to grow only 10% this year from 45 billion baht in 2019, which was a 20% gain from the previous year.
Midea Group, a Chinese electrical appliance manufacturer, is set to build its new air conditioner production facility this year on a 130-rai plot at Pinthong Industrial Estate in Laem Chabang, Chon Buri, in the government's flagship Eastern Economic Corridor.
A source who requested anonymity from Midea Refrigeration Equipment (Thailand), a subsidiary of Midea Group, said the new facility will be Midea's largest home appliance hub outside of China as well as its largest intelligent technology plant beyond the mainland.
The groundbreaking for the new factory's construction will start after the coronavirus pandemic in Thailand ends. The production capacity will be about 2 million sets initially, serving demand from both domestic and overseas markets.
The factory in Laem Chabang will be Midea's seventh air conditioner facility outside China in addition to those in Brazil, Chile, Argentina, Egypt, India and Vietnam.
Thailand is a strategic investment location for Midea Group thanks to its strong economic fundamentals. Though the economy is facing a slowdown the country is more stable than many others, with a complete supply chain for the air conditioner industry, said Midea. Many crises happened in Thailand in the past, but both Japanese and Korean appliance manufacturers will continue their investment here, according to the source.
Midea Group also has production facilities for electrical appliances through Toshiba Consumer Products (Thailand) Co (TPT) at Bangkadi Industrial Estate in Pathum Thani province and Thai Toshiba Electric Industries Co (TTEI) in Nonthaburi.
TPT produces two-door refrigerators and washing machines, with 90% of the total output exported.
TTEI produces one-door refrigerators and small kitchen appliances such as rice cookers, microwaves and hot pots, with 75% of capacity slated for the export market.