The smell of burned glue, rubber and leather still hung in the air above Ecco’s Ayutthaya factory facilities Sunday evening, after a fire broke out early Saturday destroying a store and nearly 400,000 pairs of shoes. The fire also consumed Ecco’s entire stock of raw materials in Thailand.
Only three people were inside the building when the fire started and all escaped unharmed.
Losses approaching 100 – 200 million DKK
The company reckons losses from the fire are in the region of 100 to 200 million Danish Kroner, but financial losses are not the Bredebro-based company’s main concern. The company is fully insured against fire – and against lost revenues.
The biggest worry is how to replace the lost production, Ecco’s Chief Operating Officer Mikael Thinghuus explains.
“It was actually our entire Christmas production which was lost. So we have already called together a crisis work group made up of people from all our factories in Thailand, Indonesia, China, Portugal and Slovakia, as we need to find out what to do next,” Thinghuus explained by phone from Denmark Sunday.
The Thai factory facility employs 2000 workers which makes it the biggest Danish-owned facility in Thailand.
Production at the entire plant has now been stopped and the employees sent home until the cause of the fire is pinpointed. Thai police suspect an electrical short-circuit is the most likely cause.
What to do
Thinghuus said the first step in the plan to save the Christmas production is to expand production at all Ecco factories around the world. This means asking the workers to put in some serious overtime.
Moreover Ecco Thailand needs to replenish its stock of raw materials destroyed in the fire. The goods are taken from storage at other factories around the world.
One problem does however persist. Ecco can produce the shoes in time for Christmas, but getting them distributed on time is going to be tough.
“The problem will be expensive to solve as we will certainly now be using airfreight,” Thinghuus says.
Goes to charity
With 400,000 pairs of shoes in the damaged storehouse, it would be plausible to suppose that some may have escaped the fire, something Ecco has taken into account.
“The shoes that are able to pass our quality demands will of course be sold,” Thinghuus explains.
“The completely ruined ones are useless of course, but the rest, which are damaged but still useable, will be given to humanitarian organisations,” he said.