Ecco ups Thai investment

Ecco (Thailand) plans to allocate Bt700 million-Bt800 million to its Ayutthaya shoe factory for this year and next as part of its ongoing investment strategy after noticing clear signs of economic recovery in this second half of the year.

Kitti Chaiwattanatorn, CEO of the local unit of the Denmark-based footwear manufacturer, said yesterday that Bt500 million was earmarked for this year.

About Bt285 million of that had already been spent on the first phase of setting up a footwear factory in Phichit, which will produce 1 million pairs of uppers per year. The factory will hire 1,500 workers in the first phase.

The facility is ready to be expanded progressively in the second and third phases if the global economy continues to improve, and will employ 1,500 more workers for each phase.

The remaining Bt215 million for this year will go to building a three-storey R&D lab and another mould-making facility at its factory in the Saharojana Industrial Estate.

New moulds and machines were also installed in the compound to increase overall production capacity by 20 per cent.

"We will invest Bt200 million to Bt300 million next year to install a laser-engraving machine in the Ayutthaya factory. This new machine will differentiate Ecco's shoes from our competitors," Kitti said.

Ecco (Thailand) is ready to make a solid move in the market here, he said, adding that over the years Thailand has been proven to be a great place for footwear production.

"For instance, we have invested in a new research and development centre that allows the company to move from designers' sketches to prototypes in one day only, down from 12 weeks earlier.

"Right now, we can make about 80 per cent of all moulds required for the Ecco group," he said.

While the global financial crisis saw Ecco's worldwide sales fall over the past year, the company has put in place measures to ensure that this sales downturn will be only temporary, he said.

"Now the good news is that the company is seeing the first signs of recovery appearing, with Ecco sales increasing in the US market," he said.

Ecco (Thailand) produces 5.9 million pairs of shoes and expects to increase its output to 6.8 million pairs next year.

Ecco runs four production bases worldwide, in China, Indonesia, Slovakia and Thailand, which is the largest.

Ecco (Thailand)'s sales are expected to reach Bt5 billion this year, of which Bt4.8 billion is from exports, mainly to the US, Russia, Germany, Sweden and Denmark, and Bt200 million from the domestic market.

Next year, overall sales are expected to reach nearly Bt6 billion, with Bt220 million from the domestic market and Bt5.7 billion from foreign markets.