TCMC buys stake in sofa maker
published : 13 Jun 2015 at 06:19
writer: Krissana Parnsoonthorn
SET-listed Thailand Carpet Manufacturing Plc (TCMC) has announced the purchase of a majority stake in family-owned English furniture maker Alstons for £24.5 million (1.28 billion baht).
The Thai company plans to keep the present management team in place.
TCMC, maker of the Tai Ping and Royal Thai carpet brands, will hold a 76% stake in Alstons, with the existing management owning 24%, TCMC chairman Pimol Srivikorn said.
The company bought the stake because it believes the furniture business can complement its core carpet operations, plus both companies have a family-owned business culture.
Founded in 1951, Alstons is one of the biggest family-owned manufacturers in Britain, specialising in sofa production at its factory in Colchester.
“We hope to penetrate the British market more easily by selling our carpets through Alstons’ well-established sofa distribution network,” Mr Pimol said.
Moreover, TCMC will help Alstons to export sofas for the first time to potential markets in Asean and the Middle East.
When the company gets a contract to supply carpets, it will propose Alstons sofas to clients as well.
Alstons targets upper-middle-income customers.
Last year the company generated £30 million in revenue for a net profit of £3 million.
Its furniture business has grown by 15% over the past three years, with momentum expected to continue this year.
The British sofa market is worth £600 million annually, and demand is growing as home sales rise, Mr Pimol said.
The Alstons acquisition is set to boost TCMC’s performance this year.
“We hope our revenue will rise to nearly 2.5 billion baht,” Mr Pimol said.
TCMC achieved revenue of 1.7 billion baht last year, up by 133% from 2013, for a net profit of 87.1 million baht, up 311%.
Of last year’s revenue, 55% derived from exports and 45% from local sales.
TCMC hopes to continue its growth through mergers and acquisitions.
Last year, the company bought a 49.9% stake in automotive carpet and textile maker T.C.H. Suminoe Co.
Mr Pimol said local carpet sales were sluggish in the first five months of 2015, but export sales were good.
“We'll find more potential export markets, particularly in Europe, to offset the decline in local sales,” he said.
Big foreign customers include top hotel chains, luxury goods stores and cruise lines.
In Thailand, TCMC’s customers are hotels, government agencies, large companies, exhibition centres, residential projects and cinemas.
The company’s carpet factory, located near Don Mueang airport, spans 47,000 square metres and employs nearly 1,000 carpet experts.
TCMC shares closed yesterday on the SET at 3.84 baht, up 36 satang, in trade worth 122 million baht.