Ten-year plan to recapture leadership
Japan’s Hitachi Group will boost its local production capacity for elevators, escalators and moving sidewalks in a bid to meet growing demand both in Thailand and internationally.
The long-term plan extending to 2020 is aimed at reclaiming Hitachi’s leadership position within the industry.
Phornthep Phornprapha, chairman of the local joint venture Siam Hitachi Elevator Co, said a new 1.15-billion-baht factory is planned for Chon Buri’s Amata industrial estate, bringing annual production capacity to 5,000 units.
Construction will begin in August for completion next year, with operations to start in 2013.
The existing factory, also located in Amata, has an annual capacity of 1,200 units. The initial expansion will serve Thailand and other Asean countries, along with the Middle East and India.
Plans are to double the new capacity to 10,000 units a year by 2020 for sales revenue of 10 billion baht.
The company intends to raise its local share to 25% by 2015 from 14% last year while expanding its markets abroad.
Studies are also under way on the logistics of exporting Hitachi products to Laos, Burma, Cambodia and Vietnam as cheaply as possible.
“Our long-term investment plan shows our commitment to regaining our previous market leadership position,” said Mr Phornthep.
Hitachi was the first company in Thailand to import and install glass elevators, beginning with Robinson Department Store in 1981, and moving sidewalks, at the former Mahboonkrong shopping centre in 1985.
Siam Hitachi Elevator was established in 1992 to assemble, distribute and install Hitachi elevators, escalators and moving sidewalks in Thailand.
The company’s market share fell to third place in Thailand amid the global economic crisis and domestic political turmoil that affected property development over the past three or four years.
Mitsubishi is the current leader with 30% of the seven-billion-baht market, followed by Schindler of Germany.
Dhanet Yongratanamongkol, an executive vice-president of Siam Hitachi Elevator, said the group’s cost competitiveness had been eroded in recent years when it dared not expand local production capacity, allowing its competitors to jump ahead.
“We’re confident our expansion will see us achieving our goal of reclaiming our leadership position by 2015, as our unit costs will be reduced significantly,” he said.
The company’s strong customer relationship skills honed over the years will also help, Mr Dhanet added.
Mr Phornthep said Siam Hitachi Elevator recorded sales of 1.29 billion baht last year, up 15% from 2009 – 1.09 billion from domestic sales and 200 million from exports to Asian markets.
The company is targeting sales revenue of 1.59 billion baht this year or a 23.3% increase thanks to the strengthening economy.
Of the target, 1.3 billion baht will be from domestic sales and 290 million from exports.
“The growth momentum of the construction industry will continue this year, especially with rising numbers of new office buildings and condos along mass-transit routes,” Mr Phornthep added.