In conversation with
Mr. Somchai Thaisa-nguanvorakul

FDI Spotlight: What is the DNA of SNC Former PCL?

Mr. Somchai Thaisanguanvorakul: We started our business by focusing on the upstream aspect of copper and aluminium piping, forging and machining, stamping, plastic injection, and PCB board manufacturing. Once we had specialised in all of these specific areas, we became an OEM manufacturer of home appliance such as air conditioner, freezer tunnel, water heater, and electrical parts. Due to the competitiveness of the electrical and automobile parts industry here in the ASEAN region, we realised that if we only supplied certain spare parts, we could lose business to those firms that could offer the complete solution for the client. This is why we are a one stop shop supplying our full range of the upstream parts. Furthermore we have become an ODM for global brands.

We have 3 production and distribution locations in Rayong, Samutprakan and Chonburi provinces which help alleviate logistics challenges and bottlenecks in production. In order to become a leading OEM and ODM we have ensured that our quality is unbeatable. As you can imagine, recall on faulty items is not only a costly activity but can lead to losing clients respect and ultimately their business. This is why we ensure that all of our products are made to the highest standard so our customers can have complete trust in us. Additionally we comply with the necessary international standards and certificates relevant to our industry, and welcome our clients to visit any of our production facilities to inspect our factories with their own eyes. These mentioned developments are allowing us to utilise economies of scale in producing our range of upstream parts and thus helping the company to grow sustainably.

What are the new developments you are working on at the moment?

Mr. Somchai Thaisanguanvorakul: In the past, we were using the innovation from our customers. Now the customer gives us only the idea of the product. Therefore we are using our own research and development department, to build and create the final product that we will show to the customer in order to maximize their satisfaction. Our customers were so satisfied with our quality of work when producing spare parts for them, that they have asked us to manufacture their final products as well. This creates a best of both worlds’ situation as our client can focus on the marketing and commercialisation of their products, and allows us to focus on our speciality: manufacturing the products.

In ASEAN, Thailand has the biggest supply chain. If we talk about value chains and organizational culture, Thailand is the best in the region. In the industrial, automotive and home appliance industries our nation is certainly leading as well. This is why we need to show now the innovation and value addition so we can continue to move up the value chain. I am not only talking about developing innovative products, we must also focus on the required technology and innovation that can improve the service to the end user. We have invested heavily in a new technology system that can provide real-time tracking and the status of any given product also the real-time Profit and Loss in each business unit. If the quality of our product is perfect, as well as the delivery of the product and is on time, the customer is perfectly satisfied.

The AEC has come into place on December 2015. Do you see this as a moment of challenge for SNC Former or is it a time of opportunity?

Mr. Somchai Thaisanguanvorakul: In the past our customers (that we supply parts to), were focused on the USA, Europe and the Middle East. Right now Europe is not doing very well, therefore our customers are starting to look at the South-East Asian market. As I stated, Thailand has the best quality products in the region. For many years Thailand has been a hub of investment from USA, Japan and Europe. These investors do not only come to Thailand for cost reduction, but to find manufacturers who prioritize the quality of their products. This focus on quality and meeting the standards and expectations of international investors has improved the economy of the country and given Thailand advantages over its neighbours in ASEAN. This is why we will see an increase in the number of companies using Thailand as the manufacturing base of the region for years to come.

At the moment, our country is the second largest economy in AEC, with the GDP ranked just behind Indonesia, which is quite an achievement when you consider their population is significantly larger than Thailand. There is no any better moment than now to capitalize on the AEC and to use Thailand as a manufacturing base.

How do you develop the human capital and the community around SNC Former?

Mr. Somchai Thaisanguanvorakul: I believe educational institutions while providing the correct theoretical content for students, do not quite focus on the actual practical skills that the graduates should posses by the end of their studies. As a result, most of Thai industries have to rely on their in-house training. For more than 5 years already, SNC Former has ran a joint program with Technical and Vocational colleges called “School in Factory” in order to help students acquire the necessary practical skills during a 6 months training inside our factories.

Furthermore with our complimentary scheme “Factory in school” we provide the manufacturing machines and equipment in educational environment to inspire and provide real world skills in vocational and technical colleges.

We think this is the perfect way to create a skilled work force and reduce this disparity between expectations in our industry and reality. After these programs, the company selects potential students to further study in King Mongkut’s University of Technology Thonburi for bachelor degree. 90 percent of the students come back to work with us on a supervisor level and we train them on the following 5 aspects: Financial Accounting, Marketing, Operations Management, Human Resource Development, and Environmental Social and Governance called “Mini MD” program, preparing to be successor for MD, in order to work for each business unit.

I believe the best solution is to implement an education revolution here in Thailand. We need to recognise and equip necessary skills and attitudes that will continue the development in every industry and encourage an entrepreneurial mindset that will produce many business leaders for the future of Thailand.

What is your message of confidence for the international investment community?

Mr. Somchai Thaisanguanvorakul: I encourage people to look now at South East Asia and at Thailand because our country has the best conditions for living and setting up a base here. Thai people are very friendly, the hospitality service is perfect, the mindset and philosophy of the people is libertine. We would like to see investors who can bring new technologies that Thailand can use in order to become more competitive.