Furniture-maker Picotee International has invested more than Bt100 million this year in setting up two new plants to expand its product line into panels.

"We decided to take advantage of the stronger baht by expanding our production capacity. We also see a business opportunity to export our new products to Europe, which has considerable demand for panels," said managing director Paiboon Pinitkanchanapun.

It can also support European companies that move their production base to Thailand due to cheaper wages.

He said the Kingdom was the largest production base of the panel industry in Asia at the moment.

The company already has four plants with a total production capacity for wooden furniture of 1,000 CPU per year.

The two new plants will have a panel production capacity of 500 CPU per year. They are expected to complete construction at the end of the year.

Last year the company reached sales revenue of Bt1 billion, lower than its target of Bt1.2 billion at the beginning of the year. Profit was about 3 per cent higher than in the previous year.

Paiboon said the company had been directly affected by the stronger baht because it exports 100 per cent of its production. Therefore it will boost its proportion of imported raw material from 5 per cent last year to 30 per cent this year.

"We will import more raw material, particularly oak, in order to reduce our production costs. This will also add value to our products, because most premium products from Vietnam are made of rubber wood," he said.

He said the company targeted to grow 12 per cent this year.

Meanwhile, Thai furniture industries have to face wood shortages for a while.

Paiboon, who is also vice president of the Thai Furniture Industries' Association, said the association would suggest that the Department of Export Promotion encourage private companies to grow trees by providing tax privileges.

The association will also develop an information centre to organise all details about global furniture markets and make tooling-design handbooks to educate small and medium-sized operators.

Chalida  Ekvitthayavechnukul

The Nation