CRISIS FORCES ADAPTATION

       Hoping to turn a crisis into an opportunity and take advantage of the nascent economic recovery, Thai businesses are adjusting the way they do business in a variety of ways.
       Teeradej Snongtaweeporn, deputy administrative director of Big Star, the maker of Gambol footwear, said the company had revised its strategy to focus more on own-brand products and reduce the amount of original-equipment manufacturing (OEM) of footwear for client brands.
       "We want to export more footwear under our Gambol brand, and to move away from the OEM business," Teeradej said, adding that the company currently exports Gambol footwear to 10 markets in Southeast Asia, in addition to the Middle East and Eastern European countries including Ukraine and Russia.
       "We want to reduce OEM from 40 per cent to about 20 per cent of our export business by the second quarter of next year," Teeradej said. Exports currently account for about 40 per cent of Big Star's total sales.
       "Relying too much on OEM leaves you vulnerable to clients who shift orders to lower-cost manufacturers. So we want to focus on our own brand, which is quite strong," Teeradej said.
       The company saw OEM orders from Europe plunge during the recent global economic turmoil, but was able to offset this by exporting more footwear under the Gambol brand.
       "The Thai economy is expected to recover in the second half of next year, driven by higher purchasing power among consumers, aided in part by the [government's] Thai Khemkhaeng economic stimulus scheme. We plan to increase our production capacity by 10 per cent next year. The company currently produces about 10 million pairs of footwear per annum," Teeradej said.
       The economic crisis has also brought about some changes at ICC International, according to director Somphol Chaisiriroj, who oversees the Arrow apparel brand. He said the company expected to achieve close to Bt2 billion in sales of Arrow products this year, up nearly 10 per cent over last year - but lower than the 15 per cent targeted at the beginning of the year.
       "Rather than worry about the economic crisis, I'd rather learn from it and use those lessons to formulate a new business plan," said Somphol.
       The downturn should encourage business operators to think about society in all its dimensions, he said, and not just their bottom lines.
       "It should be a mission of all businesspeople today to try and do something to help other people," he said.
       Consumers want to buy brands that make a contribution to society, Somphol said.
       In 2007, Arrow launched a corporate social responsibility campaign, "Send Me Home", with the goal of releasing eight captive elephants back into the wild. The last two elephants are due to be released next month.
       Sales of Arrow apparel were stagnant for the first six months, but grew a strong 15 per cent in the third quarter, which he attributes largely to the exposure achieved via the campaign.
       Singer Thailand, meanwhile, has revamped its instalment payment plan for electrical appliances.
       "We have increased the payment-period options from 12 and 18 months to 24 and 38 months, and reduced the monthly payments from between Bt700 and Bt1,000 to just Bt500 for refrigerators, and from between Bt1,500 and Bt2,000 to Bt900 for air-conditioners. This will make it easier for consumers to access our installment plan amid the current economic difficulties," Boonyong said.