A Life After Ikea

The listed office furniture manufacturer Modernform Group targets 15-20% growth in sales this year from 3.5 billion baht recorded in 2010, says chief executive Thaksa Busayapoka.

Mr Thaksa remains upbeat that Modernform’s prospects, which will be helped by new products such as sound-absorbent panels, walls and ceilings under the Ideacoustic brand.

The company expects to close its 2010 financial statement with revenue of 2.8 billion baht, up 16% from 2.4 billion in 2009. It will have one billion baht in backlog sales with revenue realised this year.

Despite the entry of the giant Swedish furniture producer Ikea and Chinese products next year, Mr Thaksa is still confident in his company’s prospects as it focuses more on selling to project developments, not the retail market.

“Currently 85% of our revenue is from project sales of made-to-order products. We are not in the low-end mass market. Our business model changed after the economic crisis in 1997,” he said.

About 95% of its revenue comes from the domestic market but to Mr Thaksa, the local market does not mean only Thailand but also Asean as it prepares for stronger regional integration under the Asean Economic Community in 2015.

In the longer term, Modernform Group aims to diversify from furniture, which now contributes two-thirds of total revenue. It is looking to related businesses like architecture and design and has invested in computers as well.

Modernform has also cooperated with Siam Fibre Glass Co to launch sound-absorbent panels, walls and ceilings under the Ideacoustic brand.

The company cites research indicating a quieter working environment is more efficient by reducing employee stress by 20% and errors by 10%.

The technology is not new, but Modernform claims to be first to offer the application for an office setting, with the hope of marketing it to schools later.

“This product could be very helpful in settings such as a call centre,” said Mr Thaksa, who expects 30-50 million baht in sales of the product this year.

Modernform shares (MODERN) closed unchanged yesterday on the Stock Exchange of Thailand at 50.50 baht in trade worth 7.9 million baht.


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