Lingerie maker Sabina targets Indonesia

Local lingerie manufacturer Sabina will use its manufacturing facilities in Thailand as a base for expanded exports to Asean, and plans to venture into its newest market, Indonesia, this year.

Bunchai Punturaumporn, chief executive officer of Sabina Plc, said the company has drawn up a plan to prepare for the 2015 launch of the Asean Economic Community (AEC). Rather than embarking on overseas expansion by itself, the plan envisages appointing local distributors in particular markets. The company now plans to enter the Indonesian market, which is seen as having great potential given the country’s huge population of more than 240 million.

Over the past couple of years the company has begun exporting its lingerie to many Asean countries including Vietnam, the Philippines, Myanmar, Laos, Cambodia, Malaysia and Singapore.

“We will penetrate more markets in Asean to cash in on the AEC, which will offer tax exemptions for lingerie goods. We will use our factories in Buddhamondhol district of Nakhon Pathom and the Ta Pra area of Bangkok – which have a combined manufacturing capacity of one million units per year – as our export base to Asean, as well as to serve the domestic market. About 80 per cent of the output will be under the Sabina brand and the remaining 20 per cent will be produced on an OEM [original equipment manufacturer] basis under our vendors’ brands,” Bunchai said.

Bunchai said that Indonesia and Vietnam had become export targets for Sabina, as the firm had few competitors in these markets. Lingerie products from Thailand could play leading roles in these markets based on their modern designs and superior quality, he said.

Thailand is the world’s third-biggest exporter of lingerie products.

Bunchai said the government’s measure to increase the minimum wage to Bt300 would not have a negative impact on the company’s manufacturing costs, as the company had already adjusted its manufacturing process from workers doing needlework sitting down to standing up, reducing lead time and work duplication. Productivity had increased by about 20 per cent, he said.

Bunchai said the company planned to open about 10 new Sabina standalone outlets next year with an investment of Bt1 million each. The company expects to have about 50 Sabina standalone shops by the end of this year. The company expects Bt2.1 billion in sales this year, 80 per cent from its Sabina brand and 20 per cent from OEMs. The company posted Bt1.9 billion in total sales last year. The value of Thailand’s lingerie market is expected to grow by 10 per cent this year to about Bt20 billion. About Bt12 billion of this comes from medium to high-end brands and another Bt8 billion from low-end brands. Sabina ranks second in the medium to high-end segment with a 16-per-cent market share, trailing Wacoal, which has a 50-per-cent market share.

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