The company last week officially became the first manufacturer of industrial-grade steel products in Myanmar, being one of 20 factories in Thilawa SEZ which have started commercial operations, from a total of 78 companies having purchased land in the zone.

“JICA [Japan International Cooperation Agency], the World Bank and the ADB [Asian Development Bank) have a number of plans for Myanmar,” said Aye Thiha, president of the company, which is a 45:45:10 joint venture between Millcon Steel, General Engineering (GEL) and Yangon-based Thiha Group, respectively.

“We also eye supplying our products to factories in the SEZ. If they all start construction work now, demand will be huge,” said Sittichai Leeswadtrakul, president and chief executive officer of Thailand’s Millcon Steel.

According to the Royal Thai Embassy in Yangon, Myanmar’s construction industry is expected to experience an average annual growth rate of over 10 per cent from now until 2020.

In a paper released in June, the ADB estimates Myanmar will need US$45 billion to $60 billion (Bt1.6 trillion-Bt2.14 trillion) worth of investment in transportation projects over the next 15 years.

To the executives, Millcon Thiha GEL has made a great achievement in commencing operations after a seven-month delay.

Next year, the plant, which required a $16-million investment and employs 60 workers, will be churning out 40,000 tonnes of steel pipes and fabricated products.

While 75 per cent will initially be exported to Thailand, 100 per cent of the output is targeted to be sold domestically by 2018 at the latest.

The bright future for the joint venture is warranted, Sittichai said, highlighting the natural barriers to entry that include low-skilled labour and unclear regulations.

Located in an export-oriented zone, the facility now enjoys seven-year waivers of corporate taxes, import duties on raw materials and machinery, and commercial tax.

Shifting later to satisfy domestic demand, it will be liable to Myanmar’s 5-per-cent commercial tax, but a lot of money could be saved in other respects if no product has to be shipped overseas, the CEO said.

An advantage of being the first-comer in the sector is that the company can build up a strong relationship with wholesalers, Aye said, adding, “People don’t change suppliers often.”

Having put an enormous effort into solving licensing ambiguities over the past two years, its main challenges now are in the training of labour and know-how transfer, in order to ensure industrial-standard products are made in a country where no steel standard exists.

Meanwhile, the three partners are also looking for new business opportunities.

Steel-pipe demand in a country where the use of wood remains more popular is still low at around 20,000 tonnes per annum, but more high-rise buildings could spark demand for fabricated products that could shorten the construction period.

“In Thailand, with fabricated products, we can finish a 32-floor building in 13 months. Here, with the same height, it takes some three years [using traditional methods]. Our products could be a fast and cheap answer,” said Thitipong Tangpoonphonvivat, chief executive officer of GEL.

To Sittichai, the new plant is a crucial part of Millcon Steel’s plan to shift focus from commodity steel to value-added products.

Aside from Myanmar, it is exploring possibilities in putting up plants in other CLMV (Cambodia, Laos, Myanmar and Vietnam) countries to manufacture commodity products, while the plants in Thailand – including one in partnership with Japan’s Kobe Steel – will focus more on specialised steel products, he said.

The goal is to raise revenue from value-added products from about 10 per cent now to 40 per cent in 2020.

“The grand opening today [of Millcon Thiha GEL] is part of our success in inviting Thai investors here – and we hope to see many more,” Chainarong Keratiyutwong, charge d’affaires of the Royal Thai Embassy in Yangon, said at a ceremony attended by Myanmar and Thai guests.

Petch Osathanugrah, chairman of the executive board and chief executive officer, said Osotspa had been working to improve its organisational management systems while moving towards the goal of becoming Thailand’s best consumer-products company.

It is doing this in three significant areas. First, it is striving to become an organisation that focuses on enhancing the well-being of consumers and society by offering an array of high-quality products made using advanced manufacturing innovations. Second, it is building an organisational culture that adheres to best practices. The third priority is good governance by operating its business based on international regulations and standards.

“Osotspa is marking our 125-year history during a time of significant change in both the domestic and global economies, along with increasing competition and higher expectations from stakeholders including shareholders, executives and employees, customers, business partners, and society,” Petch said.

“We are committed to making continuous improvements to achieve excellence in each and every aspect of the company. This includes enhancing our business-management capabilities; delivering a diverse range of high-quality products; implementing advanced technology systems; reinforcing our organisational culture and developing our staff’s personal skills and potential; becoming a learning organisation; and adhering to transparent administration based on international principles of good governance.

“These improvements will ensure Osotspa is administered effectively and is capable of extending and enhancing the competency of our business operations for sustainable long-term growth.”

Osotspa president Wannipa Bhakdibutr said that to reach its goal of becoming the best consumer-products company in Thailand, it was making major changes in eight key areas.

It is improving its business structure to enhance efficiency through the use of advanced technologies for management. It is taking a new approach to managing the company’s brand portfolio to match the requirements of consumers and customers.

It is implementing organisational resource information management to increase the effectiveness of customer and consumer services.

It is reinforcing the strength and competency of its business operations in terms of data management and retail and digital marketing.

It is integrating and restructuring manufacturing administration for more efficient cost management while improving operational procedures and supply chain systems.

It is becoming a learning organisation by enhancing the knowledge of executives and employees.

It is developing its workplace for a more positive and pleasant atmosphere and environment.

Finally, it is promoting safety among employees in its offices and throughout its operations to reduce accidents in the workplace.

“Although Osotspa remains a leading producer and distributor of energy drinks, with several brands in the consumer-products category, the company will continue to focus on developing and enhancing our operational excellence to ensure we can deliver a wide range of products with uncompromised quality and services for customers and consumers, which will provide a solid foundation for Osotspa’s future business expansion,” Wannipa said.

Napat Chareonkul, managing director of the firm’s lifestyle group, said his company was going in the right direction. It currently has eight developments in operation, which are expected to earn Bt2 billion in revenue this year, an increase of 11 per cent from 2015.

The eight projects are Asiatique The Riverfront, Gateway Ekamai, Pantip Plaza Pratunum, Pantip Plaza Ngamwongwan, Pantip Plaza Bangkapi, Pantip Plaza Chiang Mai, Centerpoint of Siam Square and Box Space Ratchayothin.

During the first five years of the plan starting in 2017, the company will focus its investment on retail business development in Bangkok with five flagship brands, namely Asiatique The Riverfront, Pantip, Gateway, Centerpoint of Siam Square and Box Space.

Napat said that during this development period, the company would launch the second phase of Asiatique The Riverfront, which will include an 800-key five-star hotel, a convention centre and shopping mall; Gateway Bang Sue; Gateway Rama 2; the second phase of Centerpoint of Siam Square; and Box Space Bang Na.

After that, the company plans to branch out the Asiatique model to other key tourism destinations such as Phuket, Chiang Mai, Hat Yai and Udon Thani. Each location is expected to occupy at least 50 rai (8 hectares).

“The investment on those existing brands is expected to be at least Bt20 billion, excluding land,” he said.

The company also plans to create a new brand for 30 provinces. Under this new business model, the company will join forces with partners including Big C Supercenter to turn this plan into reality.

He did not disclose further details about this new project but revealed that the total new investment should be more than Bt20 billion.

“There is more room to grow in the provinces, particularly after the implementation of the Asean Economic Community early this year,” he explained.

Once all 29 new projects are developed, the total area managed by the company will rise to 650,000 square metres from 170,000sqm now.

Asked about the firm’s overseas expansion, Napat said that the company had been in talks with potential partners but not finalised any deals yet. Expansion outside Thailand might be through joint-venture, consultation or management agreements.

Besides establishing new outlets, the company is putting emphasis on marketing activities as well as upgrades of existing |projects to boost visitor traffic| and sales revenue.

Manop Kumsawang, general manager of Asiatique The Riverfront, said that in the near future, new highlights such as the re-creation of a royal vessel from the reign of King Rama V would be constructed nearby. Asiatique will host a series of cultural events next year to attract both local and international travellers.

Veerarit Somboonsub, general manager of Pantip Pratunam, said its marketing budget would be doubled next year after a major renovation was completed this year.

Premin Lenoraset, general manager of Centerpoint of Siam Square, said that next year her mall would launch new pop-up stores and zones to encourage shopper traffic.

In 2017, TCC Land Asset World expects revenue of Bt2.3 billion, an increase of 15 per cent from Bt2 billion this year.

So far it has exported only soap made of natural ingredients under its brand Skin a day. The company will use this brand only for all its export products.

One of the company’s two co-founders and managing director Kasitpat Chinudomporn, 36, said that now Tan was looking for Asian partners to help distribute its products in other Asian countries.

“This is the first step to tap the international markets and we’ll try to expand to other countries, such as Vietnam, Indonesia, and Myanmar,” he added.

Kasitpat or “Ham” graduated with a bachelor’s degree in engineering from Mahanakorn University of Technology. He started up his own businesses when he was studying, ranging from an Internet cafe and CCTV sales, to a coffee cafe.

Kasitpat and his high school classmate Virunputt Tiradapongpisarn, who graduated with a degree in chemistry from Kasetsart University’s Science Faculty, co-founded Tan Laboratory Co in 2009 with a joint investment of Bt1 million. Their idea was to produce the skin-care products from natural ingredients to cater to Asian complexions.

With her chemistry knowledge, Virunputt, 36, conducted research and development to produce facial and body skin-care products, which have obtained approval from the Thai Food and Drug Administration (Thai FDA). The company has wholesaled the products on an OEM basis to the small hotels, spas, traditional massage shops, and online cosmetic shops.

“We started with the wholesale business as we have no experience in a retail business,” Kasitpat said.

Later the company expanded its product line to produce soaps made of Thai fruits to tap customers who favour cosmetic products made of Thai fruits.

Early this year the co-founders brainstormed a plan to start exporting products to Asian markets. They joined a Department of Export Promotion road trip to China in a bid to seek business opportunities in the massive market.

One month after coming back from the trip, Chinese people, who had bought the company’s soap range made of fruit at their booth, contacted them and that resulted in six contracts to export the products to China.

Kasitpat said that then the company created the Skin a day brand, which would be only be exported because the company did not want it to compete with the brands of its Thai customers whom it supplies products on the OEM basis.

After securing the deals in China, the company expanded the production capacity of its small factory to cater for the rising number of orders.