Vichai Jirathiyut is Managing Director of Scania Siam, which has its headquarters east of Bangkok in the area Bangplee. In late 2008 he made a startling statement. Scania Siam’s goal for 2009 was a growth of no less than 15 percent, although the international crisis now was beginning to set in seriously.
As we are now approaching the endof the year, it is time to look towards Scania and confront them with their aggressive statement. Could he and his team live up to their own ambitious goal?
“Yes, I can already promise that we will reach the 15 percent, and we will also reach well beyond,” a confident Mr Vichai says.
So how did they achieve it? Mr. Vichai is very open about the strategies, that has led to this expansion.
New segments
In order to achieve the goal of prosperity despite the financial crisis Scania would have to renew their strategies. Think in new ways.
Scania’s main ventures this year have therefore been divided into two new areas. The first aimed at work related to the many mines in particular the western and northern Thailand. Here, using trucks to transport zinc and coal from the mines was the idea, and that is an area in which Scania has succeeded in putting itself on the map.
“There’s obviously been a lot of preparation before our new ventures. We have looked very carefully at the various options and we were during the course very confident that mining was an extremely good market to move into. And it has been,” Vichai Jirathiyut explains, designating the effort with the mines as Scania’s main effort.
The director explains that Scania in his opinion has won the most tasks because they have been offering the most practical solutions for both mine-owners and customers compared to their competitors.
Scania delivered 30 trucks to mining in the spring, and here in November, they are going to deliver 30 more. However, there have already plans for further deliveries of trucks.
New opportunities
The reason why Scania suddenly aims so much on moving into new markets is very straightforward:
“It simply looked bad in several areas of the business. It can be difficult to answer, whether it was the financial crisis, or whether it was our own fault, but we were certainly under pressure and had to think in new ways, and so we did,” the Director explains.
During several meetings with other departments of Scania in the region he fetched treasured experiences, especially from Indonesia where Scania has more than 700 trucks running in mining industry. The experiences were so positive that it was something they immediately began to think into the future in Scania Siam.
“We began finding new operators which would allow us to enter new markets, and perhaps the financial crisis actually has been good for us, because we offered ourselves as available to new partners at a time when we were the best,” Khun Vichai says in confidence. He further explains that Scania is already looking for new and even more areas to expand and use the new contacts and new the know-how, such as mines in Laos.
Up and down
Another area where Scania has got more revenue this year is within the fuel transportation. Recently, the Swedish company in Thailand sold 45 new trucks to Shell sub-contractors, and this is also a part of the explanation of the growth.
But not in all areas of business life has been a bed of roses for Scania. Director Vichai explains that the company has been set violently back in terms of container shipping. That decline he attributes to the down turn in exports from Thailand that has generally been exposed, after the financial crisis sat in.
That is exactly one of the main reasons why additional need for Scania to begin thinking innovatively was urgent. Henceforth, Scania will do more in transport by country roads instead of container traffic, the Director says.
So, there have been both pluses and minuses, ups and downs in the various parts of the company the last years. The interesting question is now, whether the growth in the new areas has been enough to turn the ambitious goal of 15 percent growth into reality.
The goal reached
Has the ventures paid off, and it is already realistic for Scania to hope to reach the 15 percent growth, Vichai Jirathiyut ambitiously announced late last year?
Yes it has, if we are to believe the Director, who seems to have waited all day on that very issue:
“Yes, I can already promise that we will reach the 15 percent, and we will also reach well beyond. It is still a little hard to figure out where exactly our truck sales will end up over the last months of the year, but right now it looks as it can be both 20 percent and 25 percent over last year. It is really satisfying,” the clearly proud Director says.
Khun Vichai gives an increased internal efficiency and new segments of the business the profit of the positive figures, and he promises at the same time that Scania will continue its optimistic and very ambitious approach:
“Our goal for next year is already set. There, we will have a growth of 30 percent compared to this year,” Vichai Jirathiyut estimates self-assured.
Scania plans to boost growth next year by extending the new investments and develop them even further, such as by investing in new segments around the mining operation in for instance Northern Thailand and Laos.
Born in Bangkok
Khun Vichai has been at the head of Scania Siam since 2003, and he is gradually becoming a well trained Director. He graduated with a bachelor’s degree in Engineering from Bangkok and a Masters’ in Marketing from London. He joined Scania in 1991 and moved consistently up through the company hierarchy, and before he came right in the head, he has been second in command for a while.
Khun Vichai was born and raised in Bangkok, and for him it is something special to be allowed to stand at the head of a foreign firm:
“I’m really proud that Scania has so much confidence in me that they would put me at the head of a Swedish firm. It is an extra pat on the shoulder for me that they put a ‘foreigner’ as me as a Managing Director,” he says, and explains that it has always been the private business communities, which has been interesting to him:
“I could never se myself being employed in a governmental position. There is too much bureaucracy, and things are moving slowly. Here it goes in quickly, and that is how I like it.”
