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Steel Industry in Thailand

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    Steel Industry in Thailand has various type of product. In this report, we mainly focus in “Metal Sheet 0r Roof” industry. There are 4 companies that we have chosen which are Permsin Steel Work Co. Ltd. , Munkong Steel Company, Thai Syncon and Supplies Co. Ltd. and SV Metal World Company. We have got a high cooperation from these 4 interviewed companies. “Roof Steel” industry has high in competitive atmosphere due to the low of competitive rivalry. There are 3 levels that can measure the size of each company and the position in the market 1. Revenue more than 1,000-2,000 million Baht about 3-5 companies 2.

    Revenue around 100-600 million Baht about 10 companies 3. Revenue less than 100 million Baht and has about over 100 companies. Also, the product is similarly. There only a few thing that make them different from each other’s e. g. delivery. Therefore, they compete with each other in many ways such as price competition, quality of product competition. To survive in the industry, all the companies have to be adaptable and keep improving both internal and external company. Moreover, to satisfy customer need is also being one of the key factors to success because the marketing is changing overtime.

    Also, to get the customers loyalty and make them to do the re-purchase are very important to survive. Industry Profile1 The steel industry is a dynamic, innovative sector, which is constantly adapting and refining itself to become more competitive in the market. The industry does this by developing new, improved steel grades and production procedures that produce better and more cost-effective product lines for changing marketplace. Steel is a key material in promoting economic growth as it is critical in the creation of infrastructure, construction material, building, transport, machinery and consumer goods.

    Thai steel industry is very sensitive and plays an important role in the Thai economy, but in the year 2005, the decline of Thai economic has an effect to the steel industry as the following: After the declination of Thai economic, at the year 2007, Thailand’s had decided to join the ASEAN member. After being one of the ASEAN members, it makes the export to 2. 79 million tonnes, up from 2. 3 million tonnes. And Thailand was the largest importer of iron and steel products from japan with total volume of 4 million tonnes in 2007. Thai steel market 2005-8, with an average steel consumption growth of 16% a year.

    The overall in past 3 years, the industry quite be affect by the economic crisis. The economic growth has decreased all industry to limit their expansion and investment which lead to less building in the asset. This made the overall industry stayed still not growth which made the industry could not expand and more in investment. For the steel roof for ordinary factory segment, the problems that the industry faced are the high price competitive due to the similar in the product. Also, another problem is the low entry barriers which can make other people who interested in the industry come in so easily.

    For the high –end used segment, the problem that industry has faced was fewer than ordinary factory segment because customer would focus more on the quality of the product than the price. However, this segment has limited in the number of customers due to the smaller number when compare with ordinary factory segment. {draw:rect} (All graphs are shown in appendix) SV Metal World SV Metal World Company was established in March 2009. The establishers are Mr. Sukrit N. and Mrs. VimolmasN. They both had been Managing director of Napoom Engineer Company, SV Electronic Company, Siam Color Sheet Company and Permsin Steel World Company Limited.

    Now, they are owners of SV Metal World Company and PJM Supply Company which do business in field of install NGV Gas for cars. SWOT Analysis Strengths Service of engineering technique in building construction and have deeper knowledge in this field to talk or answer to customers. Lower price than competitors because SV always check the price rate with other competitors and set price lower a little bit to make customers interested in their product and service. They have a lot of existing customers that trust with their company.

    Service – Free transportation for customers who order the company product that no other competitors do like this. Less complex management because they rent inventory and reduce cost for company. Weaknesses Fewer product lines when compares with big competitors so it may cause risk to company because they concentrate only color metal sheet and in engineering field. It is a new company in this industry so, it hard to fight with big competitors that have a lot of budget to expand or promote itself also hard to gain trust from new customers to buy their product.

    It doesn’t provide a one stop service for customers like other big competitors e. g. interior or exterior design, find supplier for construction and etc. No high technological machine. Lack of efficiency workers Permsin Steel Company Profile1 {draw:rect} Our vision To provide the best quality steel products, technical assistance, friendly and timeliness service, to our customer To improve the efficiency of our staff, operational system and dedication in both quality and customer service. To complied with the ISO 9001 version 2008 standard. Product Capacity {draw:frame} Customer Sector {draw:frame}

    Corporate Objectives To become the manufacturing and distribution leader of Thailand’s steel industry To further improve “Suntech” brand recognition Find new solution/products to increase customer base Factory Location The company has 4 production sites in the following location SWOT Analysis Strength Service – Permsin company provide services to customer by providing most of customers need and many product line that serve many types of customer. Brand Image- It has a good reputation and brand image because it established for many years and in steel industry everyone know Permsin.

    High quality – It provides a high quality product by order from a good supplier. Weakness Distribution Channel – it concerns just a key account and don’t care to serve the small customers and that cause them less new customers than it could. Required specialists Thai Syncon TSS was established in 1996 with registered capital of 20 million Baht. The company located at Bangpakong, Chachenchao Province. TSS specializes in the manufacture and installation of Metal Roof System, FLEXSEAM, Super Panel, Hi-PUR, and complete advance technology for Insulation System.

    Moreover, we are distributor of various quality construction products such as Transparent Fiberglass sheet, Metal Louver sheet, Rock wool, Glass wool, Polyethylene (PE) foam, Polyurethane (PU) foam, Extruded Polystyrene (XPS) foam, and Aluminum foil. Major customers are Industrial Factory, Government Building, National Gymnasium, Department Store, Super Store, Warehouse, Cold Storage, Clean Room, Resort, etc, also Architect and Building Consultancy. Profile Capital Investment 20 millions Bath Number of Employees 145 persons Product Quantitative/year 4,500 metric tons of cold roll steel Turnover 11 million US $per-annum

    Address 111 Moo 1, Homseen, Bangpakong, Chachengchao 24130 Telephone (66-3)857-1333 Vision & Mission To be a leader in Roofing System and Metal Sheet products for Industrial and Residential. TTS aims to provide innovative products that: Fulfill customers’ desire and Utilization needs Draw upon in-house artistic and technical for forming, cutting, bending and insulating Come with before and after-sales service, include onsite installation Sales History The sales of the company continue increasing about 4-5 million Baht in each year.

    The company growth rate is increasing in 10% per year. The sales of the company depend on the price of the steel which has their own life cycle. Product line Metal Roof System, FLEXSEAM, Super Panel, Hi-PUR, MR & Insulation, Insulation, and accessories. SWOT Analysis Strengths Do everything standardize and consistency over time Try to satisfy customer as best as possible in both product quality and service Provide ISO to increase confident for customer Continually improvement product quality and design to be uniqueness and better than competitor Weakness

    High cost in overhead for both labor cost and machine cost Mun-Kong Steel Mun-Kong Steel Company Ltd. participated within Steel Industry for 16 years. Company established in 1994 from Taiwan entrepreneurship. The company provided many steel products to serve its customer. Mun-Kong Steel Company, LTD is a manufacturer, retailer and install the product which produce from high quality of metal coat that can use for roof, wall, ceiling, P. U. roof and etc. The company focuses on the quality and service to satisfy the customer want.

    The company provided 2 product categories to customers that are Majority and Minority. For majority product, the company provided to customer is steel for constructions and installations. For the minority product, the company provided steel accessories for building’s construction. Also, the company has BlueScope Steel Limited (Australian company) as a supplier in Thailand and they import some raw-material product from Taiwan and Korean. The company specialized in term of iron plate which its having many types of iron plate such as iron plate for roofing, gutter steel, insulator; FU Foam, FE Foam and etc.

    The company continually improves their products which contain modern and standard merchandise for construction in metal roof. Profile Kind of business: Company Limited Number of employee: 200 persons Registration Capital: 22,500,000 baht Office: 1/348 Onnut Soi59/1 Sukumvit 77 Pravej Bangkok 10250 Sales History The growth rate of company was increasing in 50. 54% by sales of the company increased from 358,038,349. 09 baht in 2008 to 539,002,477. 85 baht in 2009. In 2010, the company increased their sales around 600,000,000 baht so the growth rate of the company was increasing around 11. 32%.

    The sales of the company depend on the sales volume and the price of the steel which has their own life cycle. When compare with the company sales, the cost of the company decrease from 94. 23% in 2007 to 93. 86% in 2008. Also, other sales expenses in 2008 was dropped to 3. 80% from 4. 64% in 2007 Product line Mun-Kong steel Roofing, Mun-King skylight, Roof connector, Mun-Kong Steel siding, C-Purlin (for Roof), Rafter, C-Purlin (for Siding), Gable flashing, Corner Flashing, Seal Flashing, Ridge Cover Flashing, End Siding Flashing, Eave Flashing, Mun-Kong Steel Louver and monitor Mun-Kong Steel 580.

    SWOT analysis Strength Mun-Kong Steel Co, LTD has high quality of metal sheet roof product to serve the customer. They produce their own product by purchasing raw-material from BULLSCOPE Steel Co. , which has high quality steel in the world industry. Also, they import their raw-material from Taiwan and Korean which are the biggest steel industry in Asia. Mun-Kong Steel Co, LTD is well-known in the metal sheet roof industry as well because they are in the market for 16 years. Also, they have a good creditable in the market.

    Mun-Kong Steel Co, LTD always comes up with a new innovation product which contains many layers on production. Weakness Mun-Kong Steel Co, LTD has less distribution channel to customers. If customers want their product, they have to come to company office. Also, they have only 6-7 sales persons who can delivery products to customers. Mun-Kong Steel Co, LTD is not good in the company marketing because they do not have the advertising and company website. So, the customers who outside the industry will not aware of their product and company.

    Mun-Kong Steel Co, LTD is low on market coverage because they has only one branch of office and one branch of factory that can not cover in other area outside. For All Companies Opportunities Economic situation in Thailand seems to be better now since December 2009 and causes demand for the product increase. So, it’s out from the recession period that sales decrease for a year. Domestic Political problem in Thailand would be solved cause the confidence of investors increase, trend in this year is they invest more so, steel industry expand as well and everything is going to be better.

    Threats Price fluctuation in steel industry because of the world market price and all companies have to set price follow the world market. It means that when price changes, each company has to change also. PARTII SV Metal World Provide 3 alternative solutions for each of the key issues faced by company and discuss pros cons of each alternative. Extend more product line to other categories to make it more varieties to attract customers e. g. coil metal To expertise in color metal sheet and try to develop better product to serve customer need that it can be competitive advantage.

    Increase more workers to make inside organization process flows easier and have to find person who specialize in that position also. What is the company’s greatest strength? Which weaknesses would you recommend that company attempt to convert to strength? How might these weaknesses be converted? SV Metal World Greatest Strength – Product itself that the company specialized in few kind of product but serve more variety in this kind to serve customer need. Permsin Steel Provide 3 alternative solutions for each of the key issues faced by company and discuss pros cons of each alternative. Problem of fussy.

    The company must explain the quality and standard of the overall steel industry that the nature of steel is not perfect like the furniture then the customer must understand this point. Sometime steel transport from the factory to the customer place might be destroyed a little bit from bump in the truck. So, company need improve in the packaging or put foam in to the truck to reduce the damage from bumping. Tax zero percent of steel in China, its look like opportunity but there is a shadow problem that is a little bit terrible is low quality of steel from some factory in China.

    So, company should improve skill of the mechanic team to prove the quality of steel. And also improve the efficiency in the procurement of production. What is the company’s greatest strength? Which weaknesses would you recommend that company attempt to convert into strength? How might these weaknesses be converted? The greatest strength is Full-service Company that is selling product and transport to the customer location and finally operates and set up the product.

    For the weakness is the procurement of the company is doing with the system that taking a long time will get the final product. For the customer that need a quick time to get the product may go through the small company that can produce the product finish within one day. It difficult to convert this weakness because the company did not focusing on the small customer. Thai Syncon Provide 3 alternative solutions for each of the key issues faced by company and discuss pros cons of each alternative.

    From the problem about the fluctuation of the price of metal sheet that TSS could faced when the price of the metal sheet is increasing to be high that could make TSS hard to find the suppliers to purchase the materials for processed because there are high demand in the high price situation which many companies could have relatively high demand of purchasing that there could cause the problem of shortage of the stock To solve the problem : TSS should be handle to manage the inventory with effectively by considering the price situation, if the price of metal sheet is cheap, the company should buy in large quantities to keep the product that could be save cost to the company and there could not have the problem about the shortage that could affect brand image and credibility of TSS to be bad that might be the problem to loss the customers and market share to other competitors, so TSS should purchase the materials in the cheap price to save cost and to keep the inventory that enough for deliver to the customers if it has any order which could be the effective way to avoid the risk of loss the customers.

    There is some problem in the freight that the shortage could be occur because in the situation of price increasing in the metal sheet, it could affect to the freight to have shortage of the materials which normally shipping to us or there might be some delay of getting the materials which could result in huge loss of the company especially in credibility and sales revenue. To solve the problem : TSS should handle to negotiate and follow up the freight to make sure that there is not any problem about the shortage of the materials and maybe having the agreement with freight company to guarantee the materials sending to be on time and in the right amount related to company’s order to solve this problem.

    Human resource department is also has some problem about training the employees to be working with effectively and ethical. There might be some problem that the employees performance could not reach the needed qualification of the company that their skilled may not be enough to understand the company’s structure or the processing of work. Furthermore, some employees are not sincerely and be unethical that they might be find the ways to cheating the company maybe forge the financial statement to get the benefits from that thing, so all of these could be the problem to TSS that is always to faced with that it could waste time and money to hire another employees to train and work in.

    To solve the problem : The government, public or private sectors could play a role as helper to help many firms by build the institution of training people in specific areas that related to the needed qualification of many firms to be the basic screening and scanning of the workers to preparing before work in the organization that could be effective to the company to take lower risk to hiring the employees in ways of waste time and money and it is win-win situation that the government public or private sectors could gain benefits of high revenue from that. What is the company’s greatest strength? Which weaknesses would you recommend that company attempt to convert into strength? How might these weaknesses be converted?

    The company’s greatest strength is continually in improving in its product quality and design to be uniqueness that different to each other to satisfy the customers. The weakness that our group recommend that the company can attempt this point to convert into strength is about the high cost in overhead for both labor cost and machine cost, the company should recruit the employees with strictly due to qualifications, rules and regulations and ethical ways that could come with creative thinking and excellent in skills of working to get the most effective employees. Furthermore, the company should layoff some unnecessary labors that are not create any benefits by determine from the sales performance of that employees maybe each year to cut cost.

    In addition, in the machine cost which is high, the company can find the way to reduce cost by negotiate with the suppliers to make more appreciated agreements that take benefits to both sides to make TSS get better price of purchasing the machine and also the materials and the company should determine the product lines that ineffectively or boost low volume of revenue when compare to the others by cutting off to reduce the cost of machine because some product trend of the users could change all the time and that it affects some product lines to be ineffective anymore, so to be save the spending, cut off some machine and sold to the others might be better choice than keep or remaining run it that take cost without take any benefits. Mun-Kong Steel Provide 3 alternative solutions for each of the key issues faced by company and discuss pros cons of each alternative. The company has less information to serve its customer as the company has less reputation and no website to inform customers. Therefore, the company should have more distribution channels contributing to customers such as using internet to interact and inform with the customers, more advertising on factory, house, and building magazine. As the company is an expertise in metal sheet roof.

    The company may focus on others product category such as steel rod of construction. What is the company’s greatest strength? Which weaknesses would you recommend that company attempt to convert into strength? How might these weaknesses be converted? Greatest Strength In term of greatest strength of Mun-Kong Steel Co. , Ltd, The company has premium quality of raw-material of metal sheet roof as the products are imported from BullScope Steel Limited; the biggest our company ‘s supplier which using high quality paint over steel. Also, the company imports metal sheet roof from Taiwan and Korean which are the biggest metal roof industry in Asia.

    BullScope Steel Limited is Australian company which a world leader in quality coated steel products and innovative steel solutions. The company is a leader in steel coating technology with range of metallic coated and painted steel. The products have good corrosion resistance, excellent formability and highly durable. Moreover, Mun-Kong Steel Co. , Ltd claimed that they using high technology in painting, so the product will not crack or peel during standard roll forming. For the weakness of Mun-Kong Steel Co. , Ltd, the company has less distribution channel as the company focused only selling the product to wholesaler by only using through the company sales person.

    In order to covert this weakness the company should focus on more retailer and ended user to increase its customer and gain more revenue by using more channels. For All Companies Choose one competitor from the same industry that is successful. For competitor, list every strength and weakness that you believe it possesses both the company and products. What the key success factors of competitors? * – Permsin* Works Company Limited is one of the best steel industries of Thailand, which is in the second rank of the steel industry, only below the Bluescope Company. Permsin Company has strength in the services and Advance technology of producing steel, which it makes this company to be unique and the others competitor could not be follow them.

    On the other side, Permsin Company has the weaknesses in the distribution channel. Permsin has not provide cover all of the market, but Bluescope has provided all of the market, which is the strength of Bluescope and also strengths than the others competitors. Moreover, BlueScope had existed for the long period of time which Permsin just run the business for while. The key success factors in steel industry are marketing strategies, distribution channel and services. All above methods, we believe that are the key factor of the company to be successful in the industry. It depends on the company who can observe all of the methods very well and organize as well. Who can make the product different from the others?

    The brand image is also one of the most importance factor to be success if the company has a very worldwide brands so customers would be more interested and trustful in the company even the price more higher than the other with the same quality. What value added components could company offer to the customer that might entice them to more closely align with company? Nano technology should be use in this industry by adding more value to product itself and first, company has to find a better material to produce a product that can serve customer with higher value. Because nowadays many products try to produce in nano technology e. g. shirt, facial treatment cream, sporting goods and computer or electronic goods.

    So, from this we think that it is impossible to do this if they spend more to do research and development present o find out what is the perfect material that they should choose and adapt it to be nano technology. Kind of product that we interests is more durable by the product come out to be nano color coated metal sheet and it’s up to the process not by the quality of color but no one can do this in present because they have to spend a lot on investment and incur a lot of expenses. The objective of this nano color coated metal sheet is to make color that coat on metal stay for a long time and reflect light that can make the temperature in house decrease and not feel so hot.

    So, from this objective we think that if we offer to customer they will interest and want to try product even price is higher than existing product but it has a long life usage Is it possible for an organization to be successful despite in implementing your marketing tools or strategy? Yes, because the strategy to use Nano technology by create coat metal sheet in the operation to make process of producing the products could be effective to add-valued to the products and it could take benefits to both buyers and sellers, buyers could get higher quality in the products that is motivating them to willing to purchase the products to get high quality of products that the coat metal sheet could contain more durable, can extract the heat better to make the temperature in the located atmosphere to be cooler and better in reflect light.

    All of these things could increase the customer’s satisfaction and could build the brand loyalty to the customers that it affects to be the benefits to the company to make the product be upgrading to be premium with contain high quality and uniqueness that result to be better to the company to get better positioning in the industry ranking and the company can get more revenue and market share from the uniqueness of product that we confident that this strategy plan could make the organization to become more successful. The stumbling blocks that our group could faced to use the Nano technology to be successful is about at currently, there are none companies that can be successful in using this Nano technology in the way of coating metal sheet to make more durable because the knowledge of the workers or the entrepreneurship are not expert so that to be successful, the company has to take very high cost in R&D development to invent this Nano technology which could be very huge amount that maybe this cost could be affordable only the large companies which are famous to invest in research which also take high risk to be failed.

    In addition, another problem is that the company that would like to take this project research has to get the cooperation from the government or other sectors that for the real situation, it is hard to get the cooperation from these sectors because they could want the benefit about the huge amount of incentive in the formula with huge amount of money if this project research is successful or another reason is that to be cooperate with the company, these sectors have to take risk on investment, so they could determine from the realistic that it could be successful or not? If not, they could reject of the cooperation which can take high risk for them to get huge loss from investing. Select an unsuccessful company and find out what its weakness and why do they fail. In what respects are they similar to or different from successful company in the same industry. SV Metal World Company is the company that unsuccessful in the business.

    Its weaknesses are that the company just in the first period of operation which positioning in the new comer that it just begin to start the business only less than 1 year that the performance could be relatively low and other one is that the SV Metal World Company does not have the production factory to produce its product to be processed as the processed metal sheet. The things that SV Metal World is similar to the successful company in the same industry is its company has outsourcing the materials in the same locates like other companies but the point that SV Metal World different to the others that are successful companies is that SV Metal World Company does not have any production factory to produce its processed metal sheet, so that it has to hire other company to processed its products to sell that is inconvenience and take higher cost that different to the other companies that all of them have their own factory to producing its product lines and processed.

    What lessons can you learn from your analysis of these successful and unsuccessful company and their strategies? Our group can learn that to make the companies to be successful in the business is not easy. It could to collect the experience that have knowledge to applied for using in the real situation that after that it could create creative thinking to handle to any situations of the company by decide from experience to make the decision. After the manager of the company have many experiences to handle in all situation then to be successful, the company could have the abilities to specify the marketing strategy which it could be effectively to be successful.

    Furthermore, we learn that when the companies have experiences and can specify effective marketing strategy, the thing that could make the company success in its business is about the time that is very important factor because to get good image, brand loyalty from the customers have to take time to be growing up to create the credit from the customers that they could be trust which if we reach trust in large group of customers, it means that the company could become successful while if the company ignore to collect the experience, specify carelessly marketing strategy or be take only less time to try to expand its business with aggressively, it could be very risky to the company to be unsuccessful in the business that maybe it could take risk to bankruptcy afterward. Imagining you are consulting company, choose a unsuccessful company in the same industry and set the marketing plan that can associated to be the market leader.

    Our group could suggest SV Metal World Company that the company could create high in brand awareness by expand customer’s base to access many customers that be opportunity to make company gain higher revenue and market share. The way to expand customer’s base may be use advertising through the effective media such as through website, through newspaper media or through the magazine about the construction that include the metal sheet to distribute the information and details of the customers to make them aware and understand more in our company which if the company success in this marketing plan, it could take the company to be successful in the next time with effectively in operating.

    How can you improve the performance of unsuccessful company, and what are the implications of these recommendations over the next three years. Our group suggests the way to improve the performance of SV Metal World Company that is unsuccessful in business by Expand its customer’s base Expand more product lines Provide more after-sales services Cut some unnecessary cost that is not related to the selling such as improve the effective of logistic to be faster transportation or can carry more things in each time of transporting the products to save some cost The company should develop its packaging to attract the customers to buy.

    For the implications of these recommendations over the next three years from expected of our group could be that the company could be growing up in its business with it could has more distribution channel. Furthermore, the sales revenue could be increasing dramatically, the profit from selling the products by calculating in each unit could be increase and the market share could be increase too. In addition, the brand image could be improving to be good brand which in the next time afterward, it could create brand loyalty from the customers to the company that SV Metal World could be stronger in the business more than today for sure by the suggesting plan to develop the company to be better.

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