Major Thai footwear expansion for Ecco
19 November 2009The Danish shoemaker Ecco is continuing its investment in Thailand after seeing a clear sign of economic recovery since the start of the second half.Ecco (Thailand) Co is allocating between 700 million and 800 million baht ($21 – 24 million) in total throughout next year to upgrade production facilities and set-up a research and development centre.
CEO, Kitti Chaiwattanatorn said about 500 million baht ($15 million) had been spent this year, including 285 million baht ($8.5 million) for the first phase of a new factory in Phichit province, which will produce one million pairs of shoes per year and create 1,500 new jobs.
If the economy continues to improve worldwide, two more expansion phases could follow with another 1,500 workers hired for each phase, he said.
The remaining 215 million baht ($6.5 million) has gone into a three-story R&D building and mould-making equipment at the Ecco factory in the Saharojana Industrial Estate in Ayutthaya. The new equipment will increase the production capacity by 20%. The company will invest another 200-300 million baht ($6-7 million) next year in laser-engraving machinery at its Ayudhaya factory.
‘We are ready for a solid move in the Thai market’, Kitti said. ‘Over the years, Thailand has proven to be a great place to produce shoes. The result is that we have growth and evolved considerably during the past years.
‘The latest example is the new R&D centre that allows us to move from the designers' sketches to prototypes in only one day, from 12 weeks before.’
As well, about 80% of all moulds for the Ecco group worldwide are now made in Thailand.
‘The global financial crisis sent Ecco's global sales down but we have put in place measures to ensure that the falling sales are just temporary. Now, the good news is that we're seeing the first signs of recovery appearing with Ecco sales increasing in the US’, added Kitti.
Currently, Ecco (Thailand) produces 5.9 million pairs of shoes annually and expects to increase output to 6.8 million next year.
Ecco now has four footwear production bases worldwide: China, Indonesia, Slovakia and Thailand, which is its largest production base.
Total sales of Ecco Thailand this year are expected to reach 5 billion baht ($750 million), with exports worth 4.8 billion baht ($720 million) to the United States, Russia, Germany Sweden and Denmark.
Next year, sales are expected to reach 6 billion baht ($900 million) with 220 million baht ($6.6 million) generated by the local market and the rest from exports.
In the global market, Clark shoes rank number one, followed by Geox and Ecco. But in Thailand, Ecco is the market leader with a 20% share of the one-billion-baht premium shoe market.
Source: Bangkok Post
