Jorakay Corporation, a manufacturer of tile adhesive, grouting products and construction chemicals under the Crocodile brand, plans to invest 300 million baht in 2028 to set up a factory in Vietnam to tap strong demand and expand its export base to the Philippines and Indonesia.
Suppapong Phetsuit, the company's president, said tile sales in Vietnam are growing every year.
The market size in Vietnam is triple Thailand's usage, where the tile market has declined to 170 million square metres annually from 190 million sq m.
"Thailand uses fewer tiles each year as people opt for other materials, such as engineering wood," Mr Suppapong said. "In Vietnam, there is room for tile adhesive to expand as less than 10% of the total market uses it."
The company aims to establish a factory in Vietnam by 2028 as it expects sales that year to reach 500 million baht, a level worthy of investment. This facility will also support exports to the Philippines and Indonesia, benefiting from lower shipping fees compared to those from Thailand.
Last year the company recorded 60 million baht in sales from Vietnam. In mid-2023, it set up a subsidiary, Jorakay Vietnam Co, and an office in Ho Chi Minh City to market more aggressively in the country.
It aims to achieve 150 million baht in sales this year from Vietnam, which will be a key driver of export sales, growing to 15% of total sales from 10% last year.
At present, strong export markets also include Cambodia and Laos. The Myanmar market, which was previously robust, has slowed down due to internal conflicts. The company expects sales from Vietnam to replace it.
"We also have our sights on Malaysia for the expansion of tile adhesive and construction chemical products as the country's economic recovery is very strong and its economic policy promotes low carbon, which will be an opportunity for us," Mr Suppapong added.
Jorakay recorded 3.7 billion baht in total sales last year, a 10% increase from 2022.
Approximately 70% of these sales came from tile adhesive and grouting products, with the remaining revenue derived from paint products, decorative items and others.
It expects sales growth of 11% in 2024, reaching 4.1 billion baht.
"Despite the slowdown in tile consumption in Thailand, infrastructure or megaprojects including ports, rail systems, high-speed train, mass transit lines, highways and elevated ways continue to expand after the delay in the government's budget last year," Mr Suppapong said.
The company aims to expand its market share in the public sector with products such as high strength non-shrink grout with sulphate resistance for sea port structure, high-performance non-shrink grout for grouting structural elements, and high early strength non-shrink grout for grouting the rails for high-speed trains.
Last year the tile adhesive and cement grout market in Thailand was valued between 4-4.5 billion baht, with the company commanding a market share of over 50%.