Thai floods affect consumer electronic, cable-assembled product business

GEORGE TOWN: Local manufacturers of consumer electronic and cable-assembled products have been unable to supply to their customers in Thailand since late October due to the floods.

PIE Industrial Bhd managing director Alvin Mui said its customers were not able to place orders, as their plants were affected by the floods.

“Our cable assembly plant in Prachinburi is not flooded, but those of our customers are. Our plant is also having problems getting raw materials, so our production has slowed down.

“We won't know how badly our operations in Thailand are affected until assessment is done at the close of the group's financial year next month,” he said.

Mui said there should be recovery in orders by year-end.

PIE's cable assembly plant in Prachinburi produces cable assembled products for use in consumer and industrial electronic products. The Thai operations generate about 12% of the group's revenue yearly.

CT Frank chief executive officer Beh Cheng Siong said the company's cathode ray television and LCD television sales were expected to drop by 15% to 20% this fourth quarter, due largely to the floods in Thailand, and slower sales in the Middle East, compared to last year's corresponding period and the immediate preceding quarter.

Thailand is a significant market for the company, generating about 8% of the company's annual revenue.

“We don't have any manufacturing operations in Thailand. But we have a warehouse and sales office in Bangkok which are facing delivery problems to our customers.

“We expect the supply disruption to ease at the end of December and orders to start improving by then, although growth will be gradual. There should be a pick-up in orders by the end of the first quarter or early second quarter of 2012,” he said.

Meanwhile, Daewoo Electronics (M) Sdn Bhd director Lim Kai Seng expected demand for the company's microwave ovens and washing machines to surge next year in Thailand as the floods had damaged a lot of home electrical and electronic appliances.

However, he expected sales of aforementioned products this year to hit 160,000 units compared to 240,000 last year due to the floods.

“But our sales will pick up in 2012 due to replacement orders,” Lim said.

Daewoo Electronics' key markets in the region are Thailand and Indonesia which generates about 30% each to its revenue, while the Philippines contribute about 15% and Malaysia the remaining 25%.

Pensonic Holdings Bhd, however, is not significantly impacted by the floods.

Managing director Dixon Chew said only some the group's 500 dealers selling Pensonic household and kitchen appliances were affected.

“The impact is slight as Thailand generates about 3% of the group's revenue,” Chew added. - By David Tan

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