Thai FTA boost for Westwools

27/08/2008 - 22:00


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Jim Coles' love affair with Thailand is set to become a whole lot stronger.

Thai FTA boost for Westwools
GROWTH: Jim Coles says Westwools’ Bangkok plant will be manufacturing 80 per cent of the company’s carpets in the next year.

Jim Coles' love affair with Thailand is set to become a whole lot stronger.

It is a little over three years since his Westwools Carpets set up a base in Bangkok, and in the next 12 months the plant will be manufacturing 80 per cent of the company's carpets.

Mr Coles speaks highly of the help he has received from the Thai government and the Thai people, but the single most important factor in his decision to move his Perth business offshore was the Free Trade Agreement between Australia and Thailand.

"Thailand has allowed us to keep our Australian operations alive and to compete on the world market," he said.

"The Thai government gave us valuable tax breaks not available in Australia. The Thai work ethic is excellent, with very low absenteeism and virtually no labour turnover. There are also lower operating costs and no payroll tax."

Mr Coles is a frequent flyer to Bangkok, but his latest trip was his most rewarding. He was there to collect the award for best exporter at the 2008 AustCHAM Thailand Business Awards.

Westwools was established by wool industry icon Bill Hughes in 1976. He sold all but the carpet division to Elders IXL in 1980 and Mr Coles became a 50 per cent partner in 1987. Nine years later, Mr Coles bought-out Mr Hughes and set about changing the company's direction, including the use of synthetics.

In 2003, with heavy freight rates affecting carpet manufacturing in WA, he looked offshore to Asia, particularly China, Vietnam and Thailand.

"We approached the Thai government in 2004 to see what advantages there were in relocating to Bangkok. It obviously wanted us and registered our business as a Thai Board of Investments company, which gave us many privileges, including subsidised land and tax breaks," Mr Coles said.

The company started manufacturing in Bangkok in 2005. It now has 20 staff, but this will change significantly over the next 12 months as the Bangkok plant expands to 80 per cent of the company's production.

Most carpets will be shipped back to Australia, where the company has major contracts with the WA government (schools, Homeswest), the SA and NT governments (schools), the Commonwealth Property Group and major carpet retailers throughout Australia and New Zealand. It also has markets in China and Sri Lanka.

"Manufacturing in Bangkok and shipping back to Australia makes a lot of sense," Mr Coles said.

"It costs $4 a metre to ship from Fremantle to Brisbane, whereas only $1.90 a metre from Bangkok to Australia's eastern states and to WA."

The company's products are currently 30 per cent wool and 70 per cent synthetics, but with the expansion of the 100 per cent synthetics Bangkok base, this will change.

The coarse wool (32 microns up) so essential for carpet manufacturing is mainly sourced from New Zealand, where it is dyed from a standard colour bank and spun to the company's requirements. Indonesia, China and India are other sources.

Westwools Carpets also has a manufacturing plant in Dandenong (Victoria), using wool from New Zealand's South Island.

The company designs and builds its manufacturing equipment in-house and its 1,440 bobbin/needle-tufting machine is state of the art.


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