Sumitomo sees Thailand as hub for construction machinery sales to the region

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THAILAND could be strategically promoted by Japan-based Sumitomo Construction Machinery as the distribution and financial hub of Asean, especially CLMV (Cambodia, Laos, Myanmar and Vietnam), to cash in on the region’s high mid- and long-term potential, Kazuhiko Sasaki, the company’s president director for Southeast Asia said.

Sumitomo Construction Machinery is one of the world’s leading integrated manufacturers of industrial and construction machinery.

In Thailand, the company appointed Leadway Heavy Machinery as its exclusive distributor for Sumitomo construction machinery, including excavators and pavers, about four years ago.

Sasaki said that Thailand enjoys many strong competencies to emerge as the regional distribution and financial hub, especially for the CLMV market.

“Thailand has great potential to be a free zone distribution hub for logistics – both new and used construction machinery.

Banking and financial institutions have already started their penetration into the Myanmar market by using their forces in Thailand,” said Sasaki.

He said the company could benefit from the strength of its local partner Leadway Heavy Machinery with their long-term affiliation with the Myanmar market.

The contribution of Thailand’s distributor could act as the company’s benchmark for other distributors to follow.

Sasaki said Sumitomo Construction Machinery sees great potential for Southeast Asia and the CLMV markets, thanks to the region’s geographic positioning as a link between two giant economices – China and India.

The CLMV market also has a growing population exceeding 200 million. This will lead to great demand for infrastructure in this region.

He said the current contribution of Asean to total sales of global Sumitomo was 7.2 per cent, but it increased every year. Indonesia, Thailand, Malaysia and Myanmar are the top four markets in Asean.

“The business potential for construction machinery in responding to the high growth in the India-China linkage and China’s economic recovery in the short term is the key driving factor,” said Sasaki.

“Thailand and Myanmar should be the highest priority as our focused market in terms of market size and demand together with the good contribution of our local distributor, Leadway Heavy Machinery,” he added.

Chakart Seanchan, managing director of Leadway Heavy Machinery, said the construction machinery business in Thailand at present is driven by the launching of mega-infrastructure and water management projects.

“However, based on our experience and record in the past in Thailand’s market, mid-term demand fluctuation must be monitored carefully,” he said.

Chakart said that Leadway achieved sales of 206 units of Sumitomo excavators last year. The target for this year is 300 units, which would be a 7-per-cent market share.

“We have seen remarkable growth of our asphalt paver business in Thailand with Leadway’s sales contribution of 12 units for 37 per cent assumed market share in 2015, and 35 units sales targeted for this year with 53 per cent estimated market share,” he said.