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Baht/$ 33.41/44
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14,150
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CHADAMAS CHINMANEEVONG
The lingerie manufacturer Sabina warns that political tensions and weak consumer confidence could affect third-quarter sales.
But the company expects to meet its revenue target of 2.2 billion baht for the year by reducing its original equipment manufacturing orders and shifting towards high-end, higher-margin products. OEM currently accounts for about one-third of the company's total production capacity of 1.2 million pieces per month.
Exports currently account for 45% of production, up from 40% at the beginning of the year. The company has shifted to increase sales to France, the United Kingdom and Europe due to higher margins based on the strength of the euro, while cutting sales to the US market to 50,000 pieces per month from 500,000.
Sabina chief executive officer Bunchai Punturaumporn said profits were expected to be higher even with lower sales.
Subsidiary Sabina Fareast was also posting stronger sales thanks to the implementation of ''lean manufacturing'' techniques and a focus on higher-end products.Mr Bunchai said the company was also reviewing the possibility of returning to the swimwear market in 2009.
Sabina would also raise its product prices by 5% over the next four months to help compensate for a 10% increase in raw material prices over the past year.
The company also would open two new stand-alone shops to retail its products over the next three years, after investing 14 million baht in its first store in the Mahboonkrong shopping mall.
Sabina reported first-quarter net profits of 55.68 million baht, up from 51.49 million in the same period last year. Sales and service revenue fell 8.23% year-on-year to 466.27 million baht.
Mr Bunchai said the Thai lingerie market, dominated by Wacoal, Sabina and Triumph, was worth 12 billion baht in 2007, with 2008 growth expected at 5%.
Shares of Sabina closed yesterday on the Stock Exchange of Thailand at 58 baht, down one baht, in trade worth 41.06 million baht.
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