Ecco is Getting Back on Their Feet

A few months ago the Danish shoemaker Ecco saw their production facility in Thailand burn to the ground. Now the company is preparing to spend 350 million Thai Baht on a new global distribution centre and install machinery for future capacity expansion at its ‘wounded’ factory in Ayutthaya within this year.
     Ecco Thailand’s managing director, Mr. Kitti Chaiwattanatorn, told the local Thai press that about 150 million Thai Baht will be spent on the centre, replacing the one that burned down in April. The new centre will take up 5,300 square meters and will be able to stock one million pairs of shoes – compared with the previous stock capacity of 650,000 pairs.
     Another 200 million Thai Baht will be spent on a fifth injection line occupying 5,200 square meters for shoe production to accommodate future orders from overseas. According to The Bangkok Post, the new line will create between 200 and 300 jobs and bring the capacity of Ecco’s Thai operations to six million pairs next year. When in place, this means that the production facilities in Ayutthaya will represent more than 40 per cent of Ecco’s global capacity.

Made 400,000 Pairs of Shoes in Five Days
In spite of having suffered from not only the fire in April, but also from rising oil prices and a stronger Thai Baht, the competitiveness of the production facilities in Ayutthaya remained strong when compared with Ecco’s other main bases in China, Portugal, and Indonesia.
     According to Mr. Kitti Chaiwattanatorn, Ecco’s management in Thailand refused assistance from all factories that volunteered to help produce new products to offset the loss of the 400,000 pairs that were consumed in the fire. Instead of trusting in outside help, the management believed in the efficiency of their staff – which proved a fruitful move. Although the fire stopped operations for five days right as the factory was in the process of making the autumn and winter collection for shipment to Denmark, the staff was able to produce no less than 400,000 pairs of shoes within five days after the factory re-opened. That achievement landed Ecco a new order for another 400,000 pairs.
     So although this has been Ecco’s toughest year to date – with plenty of set-backs and practical challenges – the company looks to be getting back on their feet with combined export and domestic sales of three billion Thai Baht this year, rising to an expected 3.8 billion Thai Baht next year.

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