Index, Modernform see healthy Myanmar growth

Cambodia Construction News Laos Myanmar Vietnam

Furniture makers Index Living Mall and SET-listed Modernform Group will continue to expand in Myanmar in response to rising demand from the property sector.

They said their expansion plans in Myanmar will move forward as usual regardless of the outcome of the national election.

Modernform assistant vice-president Tummanit Suphanochakul said the company wanted to cash in on huge demand in Myanmar via two investment options.

It is studying the feasibility of setting up its own furniture factory in Yangon with an investment of 100-150 million baht, or the possibility of using a special economic zone in Tak’s Mae Sot district.

However, the decision will be made after the national election, and its annual furniture sales in Myanmar should be in the range of 30-50 million baht.

If the plan is finalised, Modernform will start constructing its furniture factory within 2017.

“Myanmar’s economic reform and open door policy have drawn many foreign investors. This creates huge opportunities for the furniture business in Myanmar,” Mr Tummanit said.

In addition, the building and construction industry is expected to reach US$6.6 billion by 2018 with an average 8% growth in the next five years.

Modernform has operated in Myanmar for three years with average annual growth of 20-30%.

It appointed local distributors to sell its products to small and medium-sized companies and will penetrate the property business in the near future.

Sales in Myanmar were 10 million baht in 2014 and are expected to rise to 15 million baht this year.

Recently, Modernform joined hands with Itoki Group, a Japanese furniture company, to expand a metal furniture business together in Myanmar.

Apart from Myanmar, it sells Modernform furniture in Cambodia, Vietnam, Laos, China, the Middle East and India. It aims at doubling its export sales to 200 million baht within 2018.

Kridchanok Pattamasatayasonthi, managing director of Index Living Mall, said the furniture market in Myanmar is less competitive than in Thailand because it has no strong local furniture brands.

Given the bright market potential, Index furniture is now available to end-users via many channels in Myanmar.

The Thai furniture store chain expects sales in Myanmar to double to 50 million baht next year and is set to grow by 15% in the next three years.

Apart from Myanmar, Index also plans to expand its furniture business to the Philippines in the middle of next year. Its second branch will be opened in Malaysia in the first quarter of next year.

Vietnam is also in the pipeline. Sales of Index are expected to reach 10 billion baht by the end of this year, with exports accounting for 5%.

MODERN shares closed on Friday on the SET at 8.60 baht, down five satang, in light trade worth 780,000 baht.