Danish jeweler PANDORA is ready to expand with a new factory in Thailand

Making murano glass beadPANDORA has found its current, more than 7000 man strong, factory in Thailand too small. Even though the company is currently acquiring land for a new factory near Chiang Mai in Thailand, plans of opening factories in other countries are still on the drawing board.

All of PANDORA’s manufacturing is done in Thailand at their factory near Bangkok’s Suvarnabhumi Airport. The factory has experienced an extreme growth over the last few years. It has its own radio- and television station, supermarket, chip payment system and soon a smartphone app that will enable workers to request leave and order uniforms without having to deal with paperwork.

While the factory has been growing in capacity and running smoothly, the last few years of political turbulence and floods have led to speculations that PANDORA would open their next factory outside Thailand. Last year managing director of PANDORA Production Thailand, Thomas Nyborg, fuelled the speculations by saying that it is risky to carry all of your eggs in one basket and that it would be wise to spread the risk. But now in 2014 PANDORA plans a new factory in Thailand.

”From a management perspective we have a lower threshold or challenge by expanding here first. It does not mean that the other destinations are taken off the list. It just takes longer to expand elsewhere. We have been in Thailand since 1982, and we are now only beginning to know how things work here,” Thomas Nyborg says.

According to Thomas Nyborg Thailand is also favorable because of the combination of quality and costs. When it comes to the new factory he won’t reveal the size, but gives a hint.

“We haven’t actually bought the land yet, so I would be shooting myself in the foot if I told the real-estate agent what we were looking for. But expect something about 5 times bigger than what we need. The only thing I learned here (at the Bangkok factory) is that we should have acquired more land,” he says.

unnamedSpread the risk

While a new factory near Chiang Mai might minimize the risk of a production halt because of a natural disaster, the political situation in Thailand is still dominated by uncertainty. But according to Thomas Nyborg political unrest have had very little impact on the production line in the past.

“From a purely manufacturing operations point of view, we have had no impact. In 2011 we lost a nightshift because the curfew was announced too late for us to bring people in before the curfew wan enforced. That was the net impact,” he says.

In addition to the lost nightshift, the factory has experienced slower custom operations, when governmental offices were blocked in the last round of protests. But according to Thomas Nyborg the political turmoil raised more questions from the board and investors perspective.

“We were more concerned on the long term effect on cost and the slowdown of development in society. Upgrading of the educational system and the liberalization in ASEAN came to a grinding halt,” Thomas Nyborg says.

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