TaeguTec Thailand Wins Customers by Driving Home Savings
After a short five years since TaeguTec opened a subsidiary in Thailand, the cutting tool giant is seeing substantial growth in one of Southeast Asia's hottest economies.
Thailand's auto industry grew substantially in 2012, producing over 2 million vehicles and in doing so, breaking previous records.
“The automotive sector is our number 1 customer,” said TaeguTec Thailand Area Sales Manager Natthakarn Choochainirun.
As the auto industry grows in Thailand on its way to becoming one of the top 10 auto producing nations, so are TaeguTec’s sales. Last year, TaeguTec sales ballooned to over 40 percent from the previous year.
The young Thai sales team recently visited TaeguTec headquarters in South Korea to brush up on existing products and learn about the new innovations coming from one of the industry's leading producer of carbide cutting tools.
“As the team leader, I feel it's important for them to come to Korea and learn about the new products because they will feel more confident about the products and everything else in the industry,” she said.
The automotive industry is a vital sector for the country's economy as it contributes greatly to exports and trade inflows. It is Thailand's second-largest export industry, after computer parts and components.
Dubbed as the Detroit of Asia, automotive has evolved into an industry with vibrant foreign original equipment manufacturer r (OEM) competition and an extensive network of supporting industries.
Thailand offers foreign investors in the automotive and mold and die sectors a comparatively low-cost yet experienced labor force. Because of this, Thailand has attracted Japanese, American and European car manufacturers who are investing millions to build new plants and expanding their current operations.
“One of the plans for this year is to grow our sales from our existing customers,” Choochainirun said. “Our top customers are buying more now and we are also planning to increase sales to our existing customers by 40 to 50 percent.”
TaeguTec Thailand runs their operation much like a cozy family owned business. First and foremost for this hot new player in the cutting tool business is to build a solid foundation with their future customers which can generally take about a year before that friendship turns into a business partnership.
Once the sale is done, TaeguTec Thailand continues their personal touch by introducing tools that help the company achieve higher productivity and lower cost.
“Recently we got a new very important account,” she said.
The company in question is Abico Fortune who exports about 90 percent of their production to American car companies.
After one year, TaeguTec Thailand took their first order from Abico Fortune to supply them with cutting tools that perform drilling, milling and turning as well as special tools that no other cutting tool company can offer.
TaeguTec tools were about to reduce cost by 10-15 percent on automotive parts made from S45 steel
But that is just one example out of the many.
Another is from PCS – one of the largest producers of parts used in tractors for companies like Nagano – to machine tractor parts made from cast iron and steel.
“They purchased tools that handle everything like milling, turning and drilling,” Choochainirun said. “We were able to improve the average tool life and reduce 25-30 percent of their cost. Tool life is some case was more.”
Choochainirun explained that the current contract is just the beginning with more lucrative contracts completed in the immediate future.
Komatsu Ltd, the Japanese multinational heavy equipment corporation that manufactures construction, mining, and military products also hopped on board the TaeguTec train when it changed its existing line with TaeguTec’s DrillRush.
The Japanese company saved 10 percent on their machining costs for parts made from S45 steel.
The mold and die sector is starting to show signs of its former glory after the great floods of 2011 washed away a viable and growing industry and ravaged people's lives as it swept through most parts of Thailand including Bangkok.
“It's nearly 100 percent recovered if they decide to stay, some have moved to another industrial estate while a few others moved to another country,” she said.