Bangkok--14 Mar--Pranda Jewelry
Pranda Group, one of Thailand's leading jewelry exporters, fetched sales revenues amounting to 3,648.8 million baht in 2013 which represented a drop of 527.9 million baht or 12.6% from 2012, according to the company’s report on 2013 operating results. The fall was mainly attributed to the overall global unfavourable economies which were not good to consumers' consumption in key trading partners such as European Union particularly for Germany, the United Kingdom, and Italy where their economies have yet to fully recover and their purchasing power have not resuscitated as expected early the year. Worse ever, the prices of key raw materials had significantly declined in a previous year, with the gold prices falling 15% year-over-year, and silver prices plummeting 23%. As a result, values of jewelry products and the company's sales revenues had substantially fallen accordingly. Nonetheless, it was fortunate that the US's economic recovery has helped stimulate a purchase while the company's branded products retail in Vietnam and Indonesia had registered robust growth.
Pranda Group was not alone that failed to achieve in raising its sales revenues to live up to the target last year, as other jewelry export peers in the industry had also coughed off-guard in similar difficult conditions, leading the country's overall jewelry shipments to shrink by 23%, the rate which was deemed phenomenal. Nonetheless, the company expects the drastic fall is just short-lived and likely to recover in 2014.
In its best bid to cope with adverse environments, the company vows to move ahead with plans to increase the company's strength and strengthen its competitiveness in the long run. By the second half of 2013, the company has started internal business restructuring by 1) raising ownership in Pranda & Kroll GmbH & Co. KG from 51% to 75% to bring about better flexibility in management and expansion of the company's branded products 2) diluting the holdings in Pranda
SCL Indonesia, which makes the jewelry products, from 50% to 19%, allowing the company to leave its focus mainly on retail business in Indonesia in accordance with the company's strategic plan to tap more into the regional economic integration and 3) shutting down Pranda Guangzhou Co., Ltd, which manufactures jewelry products in China due to intense competition and operating loss.
In 2013, the company's key revenue structure included:
Production which contributed 45% of the company's sales revenue, down 24% from a year earlier due to dropping domestic and export sales in line with shrinking local and international economic conditions, as well as a sharp fall in gold and silver prices.
Distribution business which made up for 33% of the company's sales, also saw a drop of 4% from a year before, primarily because sluggish sales in Europe where its economy remained in the doldrums.
Retail business which contributed 22% of the company's sales revenue; meanwhile, was found to increase 5% in 2013 from a year earlier, as sales in Indonesia and Vietnam surged thanks to the group's strategic policy to expand its own branded products in Asean markets.
In 2014, Pranda Group is poised to beefing up sales in the United States and European Union where their economies are expected to better recover while keeping up expansion of retail market for the group's branded products in promising markets in Asean particularly for Indonesia, Vietnam and Thailand. With more favorable components, Pranda Group expects to recoup its sales in 2014, for a growth of at least 10% this year, to 4,000 million baht.
In the longer term, the company still strongly believes in the company's competitiveness, versatile production skills and other unparalleled supporting factors. The company also has extensive Production Operation which not only makes gold and silver jewelry but also comes up with flexibility to tailor-made varying purchase orders of customers, and Design & Product Development Center that helps reduce time consumption in product manufacturing and more effectively accommodate varying demands of customers. The group also handles its own overseas
Distribution Operation not only in Asia but also in Europe and the United States, and plans to continue opening more overseas operation in emerging markets. Retail operation for the group’s own branded products as part of the group's marketing and sales diversification also now scatters throughout the key markets and new promising destinations.