Thailand’s elevator and escalator market next year is banking on aggressive expansion of the residential and hotel market with expected growth of up to 20%, says Marc Spiegel, managing director of Kone Thai Lift Plc.
Elevator and escalator inspections in Thailand need better enforcement, says Mr Spiegel.
There is also tremendous opportunity from the government’s investment in infrastructure projects including the expansion of the mass transit system.
“Market growth could reach 20% if all the infrastructure projects are actually launched next year,” Mr Spiegel said.
The elevator and escalator market in 2010 experienced slower growth of about 10% compared to the previous year, mainly due to the impact of political unrest in the second quarter, which delayed many development projects.
Mr Spiegel said both Thai and foreign consumers and businesspeople had regained their confidence after the violent events, with the construction industry moving quickly to make up lost ground. Projects that were put on hold have broken ground while a number of developments are to be built on the sites where old buildings from the 1997 Asian crisis have been taken down.
The Asean Free Trade Area also offers an opportunity with more demand for infrastructure to facilitate connections within the region.
However, as political uncertainty still lingers, a more realistic growth projection for 2011 is 10-15%.
“Thailand has not really suffered from external factors. The only thing ailing Thailand was caused by Thailand,” said Mr Spiegel, who is also the president of the Thai-Finnish Chamber of Commerce.
Although its new installation business would greatly benefit from the growing construction industry and improving economy, Finland-based Kone sees more stable revenue from maintenance and modernisation services.
He said there had been elevator companies in Thailand for more than four decades, offering a great opportunity for maintenance and modernisation service businesses to grow.
Also, there is a huge shift of demand for elevators and escalators to Asia led by China, as Europe and the United States markets are now stagnant due to the recession.
Mr Spiegel said Thailand currently has 25% greater business potential when compared to the overall US economy. The Thai market is similar to Malaysia and Singapore in terms of market size, growth and business opportunity.
The company also sees a growing market opportunity for autowalks, which Thailand has yet to utilise. Demand would be driven by growing population density in Bangkok.
The landmass infrastructure in Bangkok makes up only 8% of the overall city compared to 25% in major cities around the world.
Competition among elevator and escalator firms is expected to be focused on developing eco-efficient and energy-saving technologies amid growing global concern about the environment.
Among the challenges for the industry is buildings in Thailand still lack maintenance contract regulations on elevators.
“In Thailand and in most countries, there are many small [elevator] companies or cowboy companies that are not properly licensed or trained, so we’ve seen a number of accidents,” he said. “There should be regulations in place protecting people using the equipment such as with airplanes or motor vehicles.”