Vacon, one of Finland’s fastest growing companies, on Wednesday, October 11 opened its Regional Office for South East Asia in Bangkok, Thailand.
The opening was marked by speeches by H.E Lars Backstrom, the Ambassador of Finland to Thailand, Mr. Heikki Hittunen, Executive Vice President of Vacon and Vacon’s partner through six years Managing Director Worasak Thongsiri, W.T. Engineering Co., Ltd..
After the speeches, the three jointly cut the ribbon to the new Vacon office which opened on the fifth and sixth floor in a building behind the Hotel Novotel on Srinakarin Road near Banga Trad highway. The building, located conveniently close to Bangkok’s new international Suwarnabhumi Airport, was recently bought and completely renovated by Vacon’s partner W.T. Engineering Co., Ltd..
The opening was attended by a few hundred business partners, customers and new Vacon Thailand staff, some of whom have been transferred from other Vacon related companies.
Ambassador Backstrom congratulated the company with its new premises.
“The building and its location near the new international airport is an excellent choice,” he said, wishing the company a successful operation in Thailand and the region.
The Ambassador added that he himself came from the Vaasa region. The region has just received status as a Unesco World Heritage site because it still rises about one meter a year following the suppression during the ice age where it was buried under two kilometers of ice. The image was used allegorically to describe the similarly fast rise of Vacon on the global market.
Executive Vice President Hiltunen substantiated this growth statement with a few facts.
“This year we have expanded our factory operations in Suzhou in China, we have opened a new office in Chennai in India, we have decided to open our own enterprise in Australia,” he said – and now the Vacon South East Asia Regional Office was inaugurated.
After this, the owner of the new building, Worasak Thongsiri welcomed Vacon to the new facilities saying jokingly that their six years of cooperation had now finally resulted in a marriage.
Heikki Hiltunen explains that it is a strong tradition of Vacon to work this close with its distributors.
“With our office located in the same building as our local duistributor, we will be able to share and use meeting rooms and other facilities for formal occasions,” he says.
Vacon was established only 13 years ago in Vaasa in Finland as a reaction to ABB’s decision to move its AC drives production from Vaasa to Helsinki. Today the two companies compete in the world market for AC drives, where Vacon already has a 3 percent global market share.
AC drives – or frequency converters – are control units that regulate the power to electric motors. By regulating the power, AC drives steplessly control the rotation speed of the motor to match the need of the process. Pumps and fans are typical applications for frequency converters. Other places where frequency converters are used are hoists and cranes, elevators, paper machines, air conditioning equipment, winders, compressors and winches.
The market for frequency converters can be categorised according to the voltage range of the products. Most of the frequency converters sold operate on low voltages (110-690 V) and only a small amount of medium-voltage (2,300-11,000 V) frequency converters are manufactured.
Vacon is today one of the top ten largest electronic companies in Finland. This year, the turnover will reach 185 million euros with expectations to exceed 200 million euros in 2007.
The rise in energy prices has boosted the AC drives market, and in Vacon’s opinion, which is based on market research, this market is growing at present at a rate of 7-9 per cent a year. According to invstor reports from the company, Vacon grew during the second quarter this year much faster than the market is growing.
“Orders received, revenues and operating profit all exceeded the figures for the corresponding period in the previous year. Its performance in the first half of the year places Vacon in a very good position to meet its financial targets for 2006,” it says.
Vacon’s goal is to grow profitably, and considerably faster than the AC drives market on average. The company’s target is to achieve average annual growth in revenues of 15-20 per cent and an operating profit (EBIT) of 14 per cent. The company has set an ambitious target for return on equity (ROE) of more than 30 per cent.
The inaugural ceremony on Wednesday in Bangkok will be followed by a two-day seminar with presentations of Vacon’s products and services for new staff and existing customers.
“Our office in Thailand will further enhance our offering to our distributors, customers and service centers in the region,” says Heikki Hiltunen.
