SET-listed furniture maker Modernform Group Plc (MODERN) wants to develop more strategic partnerships both via joint venture and shared acquisitions to offset sluggish sales in the furniture business.
Thaksa Busayapoka, the company's chief executive, said next month the company is scheduled to seal a partnership with Arkitektura Co, the distributor of imported high-end home decoration from Europe such as Poggenpohl, Arclinea, Dornbracht and Viega.
The company will spend about 80 million baht to buy a 19% stake in Arkitektura to expand into home decoration and extend the customer base of Modernform Group to high-end customers.
"We are looking for more investment both in businesses that are related to our current fields or new areas to become sustainable over the long term," Mr Thaksa said. The middle to low-end furniture market has become sluggish over the past 2-3 years, with a fierce price war.
The property sector is also uncertain, with some projects unable to transfer units, he said.
"It is quite hard to make a profit, so we chose strategic investment to extend our portfolio to high-end furniture as luxury property projects continue to grow," Mr Thaksa said.
The market size of residential furniture is estimated to be worth 50 billion baht. Modernform controls only 5% of this market segment.
He said the company is also in talks with an undisclosed new business partner with a deal worth 100 million baht. The new business deal is expected to be settled next year.
Modernform is also scheduled to open its first hospital in Ubon Ratchathani in the second quarter of next year. The hospital business will be handled by a new subsidiary called Ubonratchatani International Cancer Center Co (UICC). Companies under Modernform Group hold a combined 55% stake in UICC, with 45% owned by partners.
Construction in the first phase costs 500 million baht for a new hospital named Chiwamitra, which is 75-80% completed and is due to be opened in April next year.
The company also plans to develop a wellness unit to help cancer prevention.
The expansion into hospitals is handled largely by the group's subsidiary, Modernform Health & Care Company, which distributes medical equipment to hospitals.
Mr Thaksa said the company has chosen to open the speciality hospital in Ubon Ratchathani because of the sheer number of cancer patients in the Northeast and the presence of few cancer hospitals, both public and private.
"We hope Chiwamitra becomes an alternative for patients," Mr Thaksa said.
Modernform remains committed to expanding its furniture business, he said. Recently the company spent about 20 million baht to renovate its showroom on Srinakarin Road into Modernform Furniture Shopping Gallery.
Kitipat Nerngchamnong, president of Modernform Group Plc, said the gallery focuses on the concept of metropolitan living. The company also introduced Personal Stylist, a new service that has an expert decorator provide assistance in the selection of furniture pieces and decorations. Consultation services are free for customers in the showroom.
Modernform controls a 25% market share in the 5-billion-baht office furniture market in Thailand. The company expects to increase market share to over 30% this year.
The group expects overall sales to reach 3.4 billion baht this year, up from 3.2 billion last year.
MODERN shares closed Monday on the Stock Exchange of Thailand at 4.24 baht, down four satang, in trade worth 736,170 baht.