The joint venture with parent company La-Z-Boy Inc (USA) and Morgan Furniture (La-Z-Boy in New Zealand) will make Thailand the centre for marketing in Asia in addition to being the current export centre.

CEO Dhanakorn Kasetsuwan, of the new entity La-Z-Boy (Asia), said the company had been incorporated on Wednesday with a registered capital of Bt10 million.

Dhanakorn said all marketing responsibility for 16 Asian markets, including Thailand, would be gradually transferred from La-Z-Boy (US) and La-Z-Boy (Thailand) to the new company. The US office will henceforth oversee other markets, in Europe and the Middle-East.

The new company will review the working of sales representatives to see what adjustments need to be made to enhance marketing capability in each of those countries.

Initially, the company expects to set up sales offices in China and Japan due to their huge markets and appoint sale representatives to oversee the other countries. He expects each sales representative to oversee three small countries.

Dhanakorn expects the new company to record sales of Bt140 million in the first quarter from the current US$4 million (Bt140 million) in annual sales made by the US office.

The marketing budget for each country will be determined after the company sets the target for each country. He said the budget would be 10-15 per cent of expected sales.

He expected higher sales in Japan and China than in Thailand as purchasing power was higher in Japan and the Chinese economy was on the surge.

Dhanakorn said La-Z-Boy's headquarters in the US had discussed with him since last year about making Thailand the marketing base for Asia as they felt Asians would be in the best position to oversee the region.

To cater to the increasing demand, La-Z-Boy (Asia) has set up a second plant with a Bt60-million investment. The plant began operations in October last year. Dhanakorn said the company had already bought a nine-rai plot near the second plant for its third plant, with a proposed budget of Bt60 million to Bt80 million next year.

Production capacities of its current two plants are 600 units per month, but it currently operates at 60-per-cent of capacity, manufacturing 33 products.

All products for the Asian markets are sourced from the two plants in Thailand, plants in the US and three OEM plants in China.

La-Z-Boy (Thailand) Co Ltd was established in Thailand initially as just a manufacturing base but has been seriously marketing its products in the country for the last three years.

Its sales grew from Bt40 million in the first year to Bt145 million last year. This year it expects to clock up sales of Bt160 million.

Thailand has a marketing budget of Bt25 million. Dhanakorn said that while many people recognised the brand, they did not know much about its products. The company aims to raise consumer awareness of its products and its benefits, he said.

Nitida Asawanipont

The Nation