Construction materials hit by slump

The poor economic outlook has cut local purchasing power substantially, forcing building material retailers to keep prices unchanged in order to retain customers, says Nattaya Tangmitrphracha, vice-chairman of Ubonwatsadu Co.

Ubonwatsadu, which operates the DoHome shops, said the property sector had felt the pinch of the gloomy outlook as most homeowners had delayed plans to renovate.

“We can’t increase retail prices because we would lose clients,” she said, adding that the government’s attempt to stimulate the economy by its mega infrastructure projects had not yet had an impact on the economy.

“I would say the economy remains not so well, especially for construction material retailers. Sale volume and revenue continue to slow down,” she said.

Ms Nattaya said she had adjusted her business strategy by focusing on exports and launching campaigns to stimulate orders in the domestic market.

With branches in Bangkok and nearby areas, DoHome plans to focus on all its customers and seek ways to increase sales to the government, private companies, retail buyers and the export market.

“This year, the company expects revenue to reach the target of 17 billion baht due to our well-adjusted business strategy. We expect that rising revenue from exports, especially to Asean countries, will help offset the fall in sales at home,” Ms Nattaya said.

Revenue from the six DoHome branches was 14 billion baht last year.

Ms Nattaya said the company also planned to open new branches in remote provinces such as Surin, which borders Cambodia, and Surat Thani, one of the major cities in the South.

The two branches are expected to open next year with an investment of around 2 billion baht each.

Ubonwatsadu is due to open a branch in Chiang Mai in December to tap into rising demand in the North.

“We are also looking to expand our business in Laos, aiming at major cities such as Vientiane, Pak Se and Savannakhet. However, we will expand sales via our agents first. We are not thinking of opening new branches in Laos yet,” Ms Nattaya said.

 

 

Source: http://property.bangkokpost.com/news/743128/construction-materials-hit-by-slump