Kosan sales expected to jump as prices slashed

Business News - Tuesday December 11, 2007

ELECTRONICS / AIR PURIFIERS

Kosan sales expected to jump as prices slashed

Aranee Jaiimsin

Kosan Electronics (Thailand) expects sales of its electronic air purifiers to grow 185% to 20,000 units in 2008 from 7,000 units this year due to aggressive price discounts.

Kosan has sold air purifiers under the Scana brand in Thailand since 2005. Last year, it sold 3,000 units, said Kyeong Sig Cho, managing director of Kosan Electronics' Thai operation.

Kosan's Thai operations recorded revenue of two billion baht this year from both original equipment manufacturing (OEM) contracts and the air purifier business. Next year, the company projects sales to grow more than 30% to around three billion baht.

Mr Cho said that most Thai consumers were unfamiliar with air purifiers, and demand was relatively small at 30,000 units a year at present. This year, Kosan Electronics holds a 23.3% market share.

The new technology could help eliminate infection risks from various diseases such as Sars and bird flu, the company said. It plans to spend 40 million baht on advertising. "We hope to see more clients from the upper [middle income] to high-end segment in the years to come," said Mr Cho.

The company recently opened a new air purifier plant worth four billion baht in Rayong province.

Most of the content is local; only filters still need to be imported from its parent company in Korea. Locally made products help the company save about 30% from when it used to import products.

It also plans to invest another 20 million or 30 million baht to build filter production units in 2008. Its total costs will fall more than 1,000 baht per unit.

Due to limited domestic demand, the company planned to produce only 50,000 units initially next year. Of those, the company expected to sell 20,000 units in Thailand and the rest overseas.

Air purifiers from the new factory will be distributed at modern trade outlets and shops run by Power Mall and Power Buy. Salaried workers are the main target customers, said Mr Cho.

Last weekend, the company began offering a 5,000-baht discount on each air purifier sold until the year's end. In addition, discounts of 20% to 30% would be given by April next year, said Mr Cho.

In 2009, the company will invest 40 million baht in facilities for making air purifiers used in public spaces, such as schools, hospitals and subway stations.

The domestic air purifier market has five major players: Pioneer, Honeywell, Sharp, LG and Scana.

By : Bangkok Post