Thailand's Saha Group sees sales recovery in 2018 as economy picks up

Thailand’s top consumer goods manufacturer Saha Group expects sales to improve next year as government spending drives growth in Southeast Asia’s second-largest economy, its chairman said.

Thailand’s cabinet recently approved a measure to accelerate a $45-billion Eastern Economic Corridor (EEC) development plan, a project the ruling junta hopes will attract foreign investors and lift growth to about 5 percent a year by 2020, from a projected figure of 3.5-4.0 percent this year.

“I believe the economy next year will be better ... our sales should be good,” Chairman Boonsithi Chokwatana told Reuters, without giving any specific numbers.

“The government is pushing the EEC which will be an important stimulus,” he said, adding that state spending on infrastructure projects would encourage private investment.

Saha Group consists of more than 200 companies, including Saha Pathanapibul Pcl and Saha Pathana Inter-Holdings Pcl (SPI), selling a range of products from lingerie to instant noodles. The group’s performance is seen as an indicator of Thailand’s purchasing power and consumption.

Its 15 listed firms reported a combined sales of 95.6 billion baht ($2.88 billion) in 2016.

The group’s 2017 sales will not grow much from last year, the chairman said. In the first half, revenue for SPC, which sells household products, snacks and personal care products, fell nearly 3 percent to 15.5 billion baht on weak demand.

However, sales will likely recover next year on public spending and more foreign investments.

A non-democratic government and uncertainty over the health of King Bhumibol Adulyadej, who died last October, have slowed down investments, but now that there is more clarity, investments should return, Boonsithi said.

On Tuesday, Prime Minister Prayuth Chan-ocha said general elections would be held in November 2018.

The group has said it aims to boost its online sales to 10 percent of the total over the next three years from 1 percent following a partnership with Alibaba-backed Lazada.

In line with this, Saha Group will invest over 2 billion baht in warehousing and logistics over next year. One of its projects, a 21-story smart warehouse of 70,000 square meters near Suvarnabhumi Airport in outer Bangkok, is expected to be completed after April 2018.

The group will also partner with firms from Japan next year on logistics, Boonsithi said, without giving details.

“Logistics and warehousing are crucial for successes in e-commerce,” he said.

($1 = 33.2000 baht)