Cho Thavee thrives on innovation and one-stop service
Cho Thavee Dollasien Plc (CHO), a maker of truck and trailer bodies and components and special transport products, listed on the Market for Alternative Investment in May 2013. Suradech Taweesaengsakulthai, president and chief executive, discusses the company’s strategy and outlook.
Please explain Cho Thavee’s history and business model.
Our founder, Cho Taweesaengsakluthai, began as a rice miller, managing five mills in northeastern Thailand, but his passion was engines and automobiles. About 40 years ago, he began working with Hino to provide bus, semi-trailer and transport truck body manufacturing and assembling.
Over the years, the concept evolved into a one-stop service provider with sales, bodies, spare parts and after-sales service. The business was further strengthened through a partnership with Doll Fahrzeugbau AG that differentiated Cho Tavee from our competitors.
Our policy is to invent high value-added products at a reasonable price to be the benchmark in Thailand. We offer three categories of products and services. First are our standard products, which include truck bodies, full trailers, buses, NGV vehicles and semi-trailers. Next are special designs such as ground-support equipment, fire trucks, military products and special trailers. Finally, we offer project management and services such as offshore patrol vessels, repair services to Tesco Lotus and Linfox and after-sales services.
Who are Cho Thavee’s customers?
Our customers are logistics firms such as Tesco Lotus, Linfox, DHL and other international firms that view us as not just a supplier but also a partner and ally. We also service companies such as Ch. Karnchang and Italian-Thai Development and sugar factories in the Northeast that require special vehicles. Internationally, we supply the high-loader catering truck to the Emirates flight kitchen and have the largest market share on Airbus A380 aeroplanes globally. We also have niche customers including regional navies, to which we supply defence products.
What differentiates Cho Thavee from its competitors?
The main differentiating factor is we are faster, more flexible and quicker to respond to changes in the industry.
How important is R&D to your business and the industry?
Research and development is the most critical element in this business and is part of our DNA. Our engineers continually develop and invent new ideas, processes and technologies so we can offer high value-added products and services. Currently, we have more than 90 ideas in the pipeline and own 17 patents. We’ve had independent patent experts value these patents at 90 million baht.
Cho Thavee’s business has grown very well in recent years. What are the reasons for this?
In addition to our normal business, we’ve received special projects such as recent projects with regional navies. We’ve also continually improved our products and services, resulting in higher margins. Finally, being a listed company with access to new equity has allowed us to reduce our debt exposure and interest expenses.
What effect has Thailand’s economic slowdown and the weak baht had on your business?
We prepared for the slowdown in advance and are comfortable with our clients as our standard products will continue to improve along with Thailand’s expected recovery. The weak baht has also been positive, as we can expand our market further throughout Asia and Australia.
What are the biggest risks facing your business?
First is to ensure delivery and prices, as we import our raw materials from Europe and must ensure inventories and quality control are in order. Retaining quality staff is also something we strive to do. Our workforce is all Thai, and we pay a daily minimum wage of 400 baht, higher than the government requirement. We ensure staff are trained as quality engineers and electricians and award our own “bachelor’s degree” to those passing training and technical school to ensure they stay with us and are rewarded fairly. Today we have 600 employees, of whom half do not have a high school education, but we ensure they receive our degree.
What effect will the Asean Economic Community have on your business?
Using football as an analogy, we’ve already competed in the World Cup and therefore feel very comfortable the Asean league has opened up for us, as it will allow us to expand into other markets such as Malaysia.
Where do you see Cho Thavee in five years?
We will generate more revenue via new products. The maritime orders remain positive, and we’ll expand further in the service sector so it generates revenue equal to that of standard or special products but with higher gross margins. Cho Thavee will continue to strive to innovate in order to provide high value-added products to our customers and support our Thai staff by treating them fairly.
Source: Bangkok Post