Jorakay to invest 300 million baht in Vietnam factory
Jorakay Corporation, a renowned producer of tile adhesive, grouting products, and various construction chemicals under the Crocodile brand, announced intentions to invest 300 million baht in a Vietnam factory in 2028. The investment is earmarked for the establishment of a factory in Vietnam, driven by robust demand and the company’s aspiration to expand its export reach to the Philippines and Indonesia.
The decision comes on the heels of increased tile sales in Vietnam, a trend that the company’s president, Suppapong Phetsuit, highlighted. He further noted that the market size in Vietnam is three times that of Thailand, a country whose tile market has recently experienced a decline, dropping to 170 million square metres annually from 190 million square metres.
“Thailand uses fewer tiles each year as people opt for other materials, such as engineered wood. In Vietnam, there is room for tile adhesive to expand, as less than 10% of the total market uses it.”
The establishment of a factory in Vietnam by 2028 is predicted to boost the company’s sales to reach 500 million baht, a level deemed worthy of the investment. The new factory will also support the exportation of products to the Philippines and Indonesia, thanks to the lower shipping fees as compared to those from Thailand.
Previous year achievements
Last year, Jorakay recorded sales of 60 million baht from Vietnam and in the middle of 2023, launched a subsidiary, Jorakay Vietnam Co, in Ho Chi Minh City to further market its products in the country. The company is targeting to achieve sales of 150 million baht from Vietnam this year. This move will significantly contribute to export sales, expected to rise to 15% of total sales from last year’s 10%.
In addition to Vietnam, Cambodia and Laos have also shown to be robust export markets. The previously thriving Myanmar market has unfortunately slowed due to internal conflicts, but the company expects the sales from Vietnam to compensate for this loss.
The company also has Malaysia in its expansion sights, particularly for tile adhesive and construction chemical products. Suppapong explained that the country’s economic recovery is very strong and its economic policy promotes low carbon, which will be an opportunity for us.
Last year, Jorakay reported total sales of 3.7 billion baht, marking a 10% increase from 2022. Approximately 70% of these sales were from tile adhesive and grouting products, while the remaining revenue was generated from paint products, and decorative items, among others. The company anticipates a sales growth of 11% in 2024, reaching 4.1 billion baht.
Despite the slowdown in tile consumption in Thailand, Suppapong highlighted that infrastructure or megaprojects, including ports, rail systems, high-speed trains, mass transit lines, highways, and elevated ways, continue to expand after the delay in the government’s budget last year.
To expand its market share in the public sector, the company plans to introduce products such as high-strength non-shrink grout with sulphate resistance for seaport structures, 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 Jorakay commanding a market share of over 50%, reported Bangkok Post.
