ECCO weathers the storm

Published: 24 July, 2006

Danish shoemakers ECCO are investing 350 million baht (US$9.1million) on construction of a new global distribution centre including installation of machinery which will increase capacity at their factory in Ayutthaya this year. Managing director Kitti Chaiwattanatorn said that about 150 million baht would be spent on the centre, replacing one that was destroyed in an accidental fire in April. The new facility, with an area of 5,300 sq m, will be able to stock one million pairs of shoes, compared with 650,000 pairs previously.

A further 200 million baht will be used on a fifth injection line occupying 5,200 sq m for shoe production to accommodate future orders from overseas. The new line will create between 200 and 300 jobs and bring the Thai operation's total capacity to six million pairs next year, representing more than 40% of ECCO's global capacity.

However, Kitti acknowledged that this had been ECCO Thailand's toughest year to date because of the fire, higher interest rates, exchange-rate fluctuations and the suspension of free trade talks in the absence of an elected government.

Despite this he believes the company will weather the storm, predicting combined export and domestic sales of three billion baht this year, rising to 3.8 billion next year.

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