Thanulux Public Company Limited
Thanulux Public Company Limited
Sales: THB 2.28 billion ($63 million) (2005)
Stock Exchanges: Thailand
Ticker Symbol: TNL
NAIC: 315222 Men’s and Boys’ Cut and Sew Suit, Coat, and Overcoat Manufacturing; 315225 Men’s and Boys’ Cut and Sew Work Clothing Manufacturing; 315231 Women’s and Girls’ Cut and Sew Lingerie, Loungewear, and Nightwear Manufacturing
Thanulux Public Company Limited manufactures clothing and leather goods for both the Thai and export markets. The company produces menswear, womens-wear, and children’s clothing under a variety of brand names. The company also manufactures belts, handbags, and other leather goods under the same brands. These include licenses for the Arrow, Guy Laroche, and Absorba brands, which have traditionally been the group’s core brands.
Since the turn of the 21st century, Thanulux has been building up an expanded brand portfolio, with additional brands including the Sweet Camel jeans label, MK-Michel Klein leather goods, Mizuno sportswear, Morgan de Toi womenswear, Elle and ELLE Homme, the Zazch “nature and adventure” line, Jean Louis Scherrer, and the pet clothing line Petto Kawaii, among others. Thanulux’s own brands include the Mix-Self womenswear line and La Femme, which specializes in maternity wear. The company’s production targets primarily the middle- to high-end consumer segments.
The company has also been developing its own technologies, such as its innovative cotton-silk fabric blend, Cotta Zilk, introduced in 2004. Thanulux’s main factory is also its headquarters in Bangkok; in keeping with the Thai government’s decentralization policies, the company also operates facilities elsewhere in the country, including in Lamphun and Prachinburi, and Surin. A public company with a listing on the Stock Exchange of Thailand, Thanulux is majority held by the Saha Group, Thailand’s largest conglomerate. Thanulux’s revenues neared THB 2.28 billion ($63 million) in 2006.
ARROW LICENSEE IN 1975
Thanulux was established in 1975 by a group of investors led by Boonsithi Chokwatana, son of Saha Group founder Thiam Chokwatana. By then, Saha Group, founded in 1951, had grown from a single grocery store into one of Thailand’s largest and most diversified conglomerates. Textiles and fabric production formed a major part of the Saha Group into the early 1970s, which also saw the company extend its garment production. In 1970, for example, Saha entered the women’s garment sector through the creation of Thai Wacoal, a joint venture with Japan’s Wacoal Corporation. Founded with just 24 employees, the company grew quickly into the mid-1970s. The Thai Wacoal joint venture provided a strong training ground for textile workers, which played an important role in the creation of Thanulux. Indeed, all 75 of Thanulux’s original employees were transferred to the company from Thai Wacoal.
Thailand’s rising economy in the 1970s led to the appearance and then strong growth of a middle class. Manufacturers, including the Saha Group, began developing new products targeting the higher disposable incomes of this new consumer group. This trend lay behind the creation of Thanulux, which was formed in order to exploit an exclusive license to produce and distribute the Arrow shirt brand in the Thai market. The Arrow brand, which had been in use since the 1850s, was developed by Cluett Peabody & Co. in the United States, the same company that gave the world the “Sanforized” preshrunk garment treatment.
Because the ready-to-wear market was still undeveloped in Thailand, Thanulux’s early period was marked by relatively little competition. The company was soon able to overcome consumer resistance to ready-made shirts, in part because of the rapid inroads of Western-style fashions into consumer preferences. As Thanulux built up the Arrow shirt brand in Thailand over the next several years, the company also began to add other men’s clothing items, extending its Arrow range to include knitwear, trousers, and pajamas. This extension, and the growing skill levels of its production staff, enabled Thanulux to begin supplying the export market for the first time, starting in 1977. The European market became a major export destination for the company’s textiles production, as did neighboring Asian markets.
Thanulux once again narrowed its focus, however, when in 1980 its slacks and knitwear production was spun off into a new company, People’s Garment Company, which nonetheless remained within the Saha Group. At that time, Thanulux extended its Arrow license into a new direction, that of leather goods. The company launched this production in 1983, developing a line of belts and wallets. By then, Thanulux had moved to a new and larger factory complex in Soi Chongnonthri, Bangkok, built in 1982.
The increased production area paved the way for the company’s development of its brand portfolio. In 1984, Thanulux added two new staples to its licensed clothing production, the Guy Laroche menswear line, and the Absorba children’s clothing line, both from France. During the 1980s, also, Thanulux launched its own branded clothing ranges. These included La Femme, a line of maternity clothing introduced in 1986, and Mix-Self, a womenswear brand created in 1987. As with its licensed clothing, Thanulux remained focused on Thailand’s ever-growing middle class and high-end consumer sectors.
PUBLIC OFFERING IN 1988 AND NEW PARTNERSHIPS
Thanulux reincorporated as an unlisted public company in 1988 and extended its Guy Laroche franchise to include licensed swimwear, underwear, and trousers bearing the French designer’s name. Into the 1990s, Thanulux sought out fresh brand additions. The company added a number of licenses during this period, including the “nature and adventure” clothing brand Zazch, acquired in 1990.
Thanulux also began developing a network of joint-venture partnerships, particularly with foreign textiles groups eager to take advantage of the lower wages in the Thai market. In 1988, the company formed the Thai Shikibo shirt production joint venture with Japan’s Shikibo Corporation. In that year, also, the company created a second joint venture with a Japanese company, Thai Staflex, to manufacture fusible interlinings in partnership with Dynic Corporation. In support of these and future joint ventures, Thanulux opened a production facility at the Saha Group’s industrial complex, Shapat Sriracha Group Industrial Estate, in 1989.
Thanulux will be the leader of the fashion industry in Thailand and the region. Its mission: 1. to satisfy customers with excellent quality and highly impressive service; 2. to satisfy shareholders with a strong intention to increase wealth for the shareholders; 3. to satisfy employees with learning opportunities, personal development, professional stability, and good remuneration.
Thanulux also adopted the Thai government’s decentralization policies, designed to spread the country’s industry operations into its impoverished rural regions. In 1993, with investments and backing from the government’s Board of Investment, Thanulux opened two new production facilities, a leather goods factory in Lamphun province and a clothing factory in Prachinburi province.
Into the mid-1990s, Thanulux continued to seek out new partnerships. The company was one of the four founding shareholders (together with Saha, Thai Wacoal, and another Saha Group subsidiary) behind the creation of SSDC (Tigertex) in 1994. That company specialized in fabric bleaching and finishing, supplying its shareholders’ operations and others. Also that year, the company added a joint venture, Thai Nakamura, with Japan’s Nakamura Corporation (later renamed as Naxis).
Thanulux, which had restructured as Thanulux Public Company Limited in 1994, was at last granted government permission to list its shares on the Thailand Stock Exchange. The company quickly build up a strong international shareholder base; by the midpoint of the first decade of the 2000s, nearly 30 percent of the group’s shares were held outside of Thailand. Nonetheless, the Saha Group remained the company’s controlling shareholder.
In the meantime, Thanulux continued to build its brand portfolio. In 1995, the company received the license for the French leather goods brand Jean Louis Scherrer. Two years later, Thanulux added a license from Daks, the high-end tartan fabric producer based in the United Kingdom. This was followed by two more high-end brands, BSC, and the Elle Homme underwear brand. The addition of these licenses, and the continued loyalty of the company’s longtime licensors, helped Thanulux survive the bruising economic crisis that swept through Thailand and most of the Asian region in the second half of the 1990s.
FABRIC INNOVATOR FOR THE NEW CENTURY
In keeping with its high-end consumer focus, Thanulux upgraded its production operations into the 2000s, achieving ISO 9001 certification in 2002. This coincided with a restructuring of the company’s operation, including the integration of some of its production subsidiaries, completed in 2001.
While maintaining its core licensed production into the middle of the first decade of the 2000s, Thanulux had launched its own research and development efforts in order to create new and innovative fabric types. This effort resulted in the launch, in 2004, of the company’s Cotta Zilk fabric. The new material consisted of a blend of silk and cotton, offering the smoothness of the former with the washability of the latter. Thanulux launched large-scale production of the fabric that year, with an initial capacity of 500,000 yards per year. While the new fabric was destined chiefly for the company’s own high-end brands, Thanulux also acknowledged its interest in supplying the broader textiles industry. Indeed, by 2006, the company had received interest from such international brands as LaCoste and Elle. The success of the Cotta Zilk fabric led Thanulux to prepare an expansion of its production capacity, announcing plans to extend its Surin province garment plant in October 2006.
By then, Thanulux had succeeded in developed another innovative new fabric. Called Tanac Air Flow, this fabric offered light weight, fast drying, and high ventilation abilities, providing a cooler, more comfortable garment. The new fabric was developed especially for tropical climates.
Into the second half of the first decade of the 2000s, Thanulux had also expanded its operations beyond Thailand, adding shareholdings in a number of markets, such as a 19 percent stake in Miwaki Philippines Inc., a leather goods distributor in that country. Thanulux also entered the Chinese market, through a production joint venture in Guangdong. After more than 30 years, Thanulux had developed a strong stable of brands, and a major position as a high-end clothing supplier to the Thai and export markets.
M. L. Cohen
- Thanulux is created as part of Saha Group to produce Arrow brand shirts under license for the Thai market.
- Licenses for Guy Laroche and Absorba brands in Thailand are added, and new brands are developed, including La Femme (maternity) and Mix-Self (womenswear).
- Name is changed to Thanulux Public Company Limited.
- Company goes public on Thailand exchange and gains license to Daks brand of tartan garments.
- Company develops new cotton-silk fabric blend, Cotta Zilk, and plans to expand production at Surin factory.
Deluxe Bijou Company Ltd.; International Leather Fashion Company Ltd.; Morgan De Toi (Thailand) Company Ltd.; S. Apparel Company Ltd.; Thai Monster Company Ltd.; Thai Takaya Company Ltd.; Total Way Image Company Ltd.
Sar-A-Lee Inc.; Vietnam National Textile and Garment Corp.; EMKE Group of Cos.; Jiangyin Canal International Trading Company Ltd.; Industria de Diseno Textil S.A.; South African Clothing Industries; Shanghai Conch Apparel Company Ltd.; Sunflag (Tanzania) Ltd.; Weihai Huiquan Industry Head Office; Malwee Malhas Ltda.; DELTON AG.
“Acquisition of Ordinary Shares of S. Apparel Co. Ltd.,” Thai Press Reports, June 16, 2004.
Jitpleecheep, Sukanya, “Firm Develops New ‘Cotta Zilk’ Combination of Thai Silk, Cotton,” Bangkok Post, June 10, 2004.
“Thanulux Absorbs Unit,” Nation, July 19, 2001.
“Thanulux Acquires Stakes in Duo,” Nation, October 17, 2001.
“Thanulux Eyes Move to Surin,” Nation (Thailand), October 11, 2006.
“Thanulux Has High Hopes for Innovative CottaZilk,” Worldsources Online, June 10, 2004.
“TNL Reports on Company Performance for the Year 2005,” Thai Press Reports, February 27, 2006.