Modernform Group (MODERN) targets revenue growth of 20% to 3.6 billion baht this year despite rising costs.
Chief executive Thaksa Busayapoka says the minimum wage law is not a big problem because the labour shortage is already forcing up wages, with some nearby factories offering 350 baht a day now.
The SET-listed furniture manufacturer expects sales will start rising in the second quarter in line with growth in the property industry plus growing demand for office furniture, partly to replace damage caused by last year's flooding.
Chief executive Thaksa Busayapoka said the imminent hike in the daily minium wage will add only 1-2% to his company's costs.
"The labour shortage means the mandatory wage increase will make a very low impact. Factories have already raised wages to attract workers. We see one of our neighbours offering 350 baht a day plus extra benefits," he said.
Modernform plans to boost productivity and automation to remain competitive, especially finding ways to help move products through the production process, said Mr Thaksa.
This means focusing more on outsourcing production of its designs to other countries, such as Malaysia or China, and then importing the finished goods.
At present, this method accounts for 30% of output.
By boosting automation and outsourcing, Modernform can keep operating without having to add more staff to its 2,500-strong workforce.
However, rising costs will still force the company to increase prices by 5-6% on average next week.
Yesterday saw the launch of a new ready-to-install kitchen set that can accommodate the rather active style of Thai cooking, with its constant chopping, pounding and stirring.
The product is made from cement composite and is sturdy enough to emerge unscathed from flooding.
Modernform expects to sell at least 1,000 sets this year, generating 50-80 million baht, rising to 100 million baht next year.
Mr Thaksa said the new product will help to attract more customers to the company's range of high-end kitchens, of which 600-700 million baht worth are sold each year.
Modernform enjoys a 20% share of the country's 3-billion-baht high-end kitchen market.
MODERN shares closed yesterday on the SET at 6.45 baht, unchanged, in trade worth 1.74 million baht.
