Makli

Business Operations of the Company and its Affiliates

Singer Thailand Public Company Limited is the distributor of sewing machines, electrical appliances under the "Singer" trademark, and other products with various brand names such as motorcycles, etc to serve the need of the customers.

Direct sales are conducted by the field sales and collection team of more than 5,000 Singer representatives and more than 200 branches in all regions of the country. It has the largest and widest home appliance distribution network in Thailand.

Singer products can be categorized in product groups as follows:

"Singer" Brand

* Sewing machine products'sewing machines, ironing press machines, needles, multi-purpose lubricating oil, scissors and sewing accessories
* Electrical home appliance products'refrigerators, freezers, washing machine, gas stoves, air conditioners, microwave ovens
* Audio and video products?color televisions, DVD players, VCD players, stereo sets

Multi-brand products:

* Motorcycles
* Satellite dishes
* Personal Computer sets and Notebook

Under the "Singer" trademark, the Company sells products on both cash and hire purchase basis via direct sales channel, Company's branches and authorized dealers throughout the country nationwide. Most of products that were distributed by Singer Thailand Public Company Limited are purchased with OEMs (Original Equipment Manufacturers) and the majority of them are manufactured in Thailand.

Singer Thailand Public Company Limited holds over 99 percent in two subsidiary companies: Singer Industries (Thailand) Company Limited and Singer (Broker) Company Limited.

New Products

The company has introduced new products to suit the various need of customers and to continue and provide sale support for the old products. The company still uses direct sale as the main strategy which emphasizes to the middle-income customers who live in outskirts and country sides.

"Computer SVOA"The Company anticipates with the possibility and opportunity for personal computer market. With the ownership ratio at 18% of the total number of households nationwide, the opportunity for market growth rate is very effectiveness. The channels of distribution for personal computer are to dominate in the city downtown with the high competition both on pricing and servicing, on the other hand the Company targets customers living in the outskirts and rural area, wherever uncontested market exists. The Company decided to distribute the SVOA personal computer sets to fulfill the needs of middle and lower class income customers in the outside area by joining with the business alliance company - SVOA, with full support on the sale training and after-sale services given to the "SINGER" customers.

New Ways of Selling Mature Products

The Company has recognized that the market for its core home-appliances products namely televisions and refrigerators is a mature market with a high penetration rate and high ownership ratio (in 90% to 98% range basically a replacement market). To respond to such an environment and ensure its growth and development, the Company has implemented an aggressive multi-products, multi-brands trade-in marketing strategy.

The Company's overall strategy is to take advantage of its unique positioning in the market, being one of the few companies with nationwide direct selling operations offering trade-in benefits on a large scale.

Affiliated Companies

Singer (Broker) Limited
Singer (Broker) Limited is an authorized dealer of life insurance and is currently the appointed dealer for Muang Thai Life Insurance Company Limited. Only those Singer Thailand Public Company Limited's employees who have life insurance authorized dealer permits are assigned to sell life insurance to customers.

Singer Industries (Thailand) Limited
Singer Industries (Thailand) Limited was established to serve as an assembly plant for sewing machines, gas stoves, light industrial motors and sewing machine oil. Singer Thailand Public Company Limited had distributed these products in Thailand and to several other countries. In 2002, the Company ceased manufacture and assembly of the above products and switched to lower cost imported products. The future strategy for this affiliated company is under review.

Product Procurement
Sewing machines are purchased through Singer Sourcing and are manufactured principally in China and Brazil. The costs of importing finished sewing machines are lower than the costs of manufacturing and assembling domestically. Goods purchase from the overseas manufacturers account for approximately 5% of the Company's total purchased goods.

In the case of "Singer" electrical appliance products, the Company purchases from domestic manufacturers (Original Equipment Manufacturers), who manufacture under license. Major suppliers of the household electrical appliances to the Company include :

1. 1. Haier Electric Public Company Limited, which manufactures refrigerators and washing machines.
2. 2. Sanyo Commercial Solution Company Limited, which manufactures freezers, and wine storage coolers.
3. 3. Thai Sumsung Electronics Company Limited, which manufactures refrigerators, air conditioners and washing machines.
4. 4. Sharp Thebnakorn Company Limited, which manufactures televisions and stereos.
5. 5. TCL Electronics (Thailand) Limited, which manufactures televisions.
6. 6. Premier Manufacturing Company Limited, which manufactures gas stoves and hot-cold water dispensers.
7. 7. Blue Sky Electric Company Limited, which manufactures water heaters and rice cookers.
8. 8. Hitachi Company Limited, which manufactures water pumps.

Singer Thailand Public Company Limited also sources other products under various brands in order to extend company business and offer a wide variety of choice for the customers. These products include motorcycles which are sourced from Tigar Motorsales Company Limited and Kawasaki Motor Enterprise (Thailand) Company Limited, Samart DTH Satellite dish from Samart Engineering Company Limited and SVOA Computer sets from SVOA Public Company Limited.

Information System Development
Singer Thailand selected IFS Application as an ERP tool to manage its core business function. There are many modules in the IFS application customized for Singer Thailand, such as, Accounting, Sales, Hire Purchase, Logistic, Inventory Control, Human Resource Planning, Service Centre, and Business Performance. Moreover, IFS Application will help the company in measuring of the key performance indicators with faster results and more efficiently.

At present, under phase I plan the sale system has been installed in more than 200 branches, and the plan is expected to be completed by the first quarter of 2009. The system will provide the effective branch management and control system by reducing the manual operation on documents management, moreover it will subsequently improve the data processing process.

Market and Competitive Condition
Business Strategy
The direct sales distribution channel continues to be the major driver for both product sales and hire purchase income. The company's products are reliable and trustworthy as the strictly quality control measurements are implemented with all suppliers. The Company's core target customers live in rural areas with low disposable incomes. The Company has applied five different selling methods and distribution models :

1. 1."Singer Direct" is the model in which seller and collector is the same person.
2. 2. "Singer Direct Plus", the model where the sales and collection functions are carried out by different people.
3. 3. "Singer New Model" a new system developed from "Singer Direct" and "Singer Direct Plus", where the sales and collection functions are carried out by different people, adding a more effective control system and co-responsibility.
4. 4. Wholesale is the sales via authorized dealers as well as new distribution channels such as the modern trade. This channel is utilized primarily for sewing machines and small household electrical appliances.
5. 5. Smart Select , Second hand Shops on "Cash and Carry" concept has been re-established in the fourth quarter of Y2007.


The strategies for the coming year with the high ownership ratio marketing environment for the main products of the company, the electrical home appliances such as refrigerator and television, the marketing strategies are formulated in order to compete in the low growth rate market. The company is determined to select the trade-in option campaign for the used multi-brands and products with the maximum value at Baht 4,000. Other products like washers, freezers, and beverage coolers, etc. also able to enjoy the trade-in promotional program. Along with the marketing tools, new products will be launched for penetrating the new market space and serving as the variable choice to the customers. Satellite dish and Personal computer sets were introduced in order to reinforcing our mission "SINGER commits to be the trend setter in consumer finance with our distinctive products that are enjoyed in every home".

Distribution Channel Strategies
95% of the Company's gross sales are generated through the Direct Sales channel and over 90 percent of the Company's gross sales are on hire purchase. The Company distributes products through its branches and at present, there are more than 200 branches nationwide. More than 5,000 field sales people who the Company has trained to be knowledgeable and understanding in the Company's products. These salespeople are an important force in the Company's market expansion.

As for the quality control of leasing accounts, the Company conducts post sales checks by assigning account checkers to audit the correctness of all leasing account information. This is to verify whether sales have been made at the prices reported to the Company, by visiting the customers' home. At present, the company has 135 account checkers to audit the leasing accounts throughout the country. In addition, at the Company's headquarters there is an independent team that controls the operations of all account checkers and verifies the accuracy of leasing contracts.