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GS Battery Hits Performance Target

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BANGKOK, THAILAND – May 25, 2009: Siam GS Battery Group, Thailand’s leader in storage battery innovations, today announced impressive performance in 2008, beating the target set for the year with total revenues of 7,780 million baht, thanks to continued analyses of the economic situations and dynamic planning of proactive strategies. Foreseeing promising growth opportunity in the replacement battery market, the group will in the second half of this year give a special focus in this market with a goal to boost its market share to 40% within three years. The plan will be supported by a series of marketing campaigns toward both dealers and end users, plus introduction of a new product innovation in storage battery. The group has set a total revenue target of 6,800 million baht for this year.

Mr. Prakasit Phornprapha, Director of Siam GS Battery Co., Ltd. and Siam GS Sales Co., Ltd., the manufacturer and distributor of GS Battery for automobiles, commented: “GS Battery Group successfully retained our leadership in the automobile battery market last year as we kept our watchful eyes on the economic conditions and carried out continued analyses of the business environment, which helped us react effectively to the situations in a timely manner. As a result, we achieved our target by recording total revenues of 7,780 million baht in 2008 with strong contributions from our two companies, Siam GS Battery and Siam GS Sales.”

Siam GS Battery, which is engaged in original equipment manufacturing (OEM), replacement equipment manufacturing (REM), and export manufacturing of storage batteries for motored vehicles, posted revenues of 4,800 million baht last year while Siam GS Sales, the distributor of GS Battery products in REM market, booked 2,980 million baht in revenues.

“As for this year, we will center our strategies on proactive marketing of the product line for personal passenger cars and pickup trucks. This includes sales promotional activities and introduction of new products in each category to better respond to the demands of consumers. We are also emphasizing on efficiency of our inventory management, effective raw materials planning to curb world price fluctuations, and especially well-planned production on which sales and marketing are dependent. We feel confident that the strategies will equip us with the needed strength to withstand the global economic downturn and, again, hit our revenue target of 6,800 million baht this year,” Mr. Prakasit continued.

GS Battery has a production capacity of 4 million units per annum as a result of a recent investment of 100 million baht in new machinery and equipment in 2007-2008. The production currently runs at 70% of the total capacity.

Mr. Vichit Buasri, Managing Director of Siam GS Battery, added: “The global economic downturn has cast a strong shadow on the automotive industry worldwide, causing a slowdown in the growth of OEM market, which accounts for 25% of our total sales. However, there is still ample room for growth in REM market because the number of cars on the road did not decline and they still need replacement of parts and equipment. We have therefore focused our marketing in the first half of this year on expanding our replacement battery business and export market. In the latter, we underline the strength of our products in international-standard quality, with four Southeast Asian nations – Myanmar, Cambodia, Laos, and Malaysia – as our key markets. At present, Myanmar is our biggest market among the four, with export value of 400 million baht a year.”

Mr. Saran Chinprahat, Managing Director of Siam GS Sales, explained: “We foresee the growth potential in the REM market and have set a target to increase our market share from 35% in 2008 to 40% within three years. From insightful market information, we came to a finding that maintenance free storage battery has only 10% share of the total replacement battery market. We have therefore joined hands with GS Battery in Japan in product R&D and brought about a new storage battery innovation featuring Dry-MF Technology (D-Tech), to be introduced to Thailand and Southeast Asia for the first time. The new product is slated to be on sale mid of this year. In addition, we have also implemented a new product concept “Always Fresh and Powerful Unwrapped”, which addresses the restriction of batteries in terms of shelf life regarding the need for electric charge if they are kept on shelf for longer than three months. Along with reasonable price, we believe that these moves will help maximize satisfaction of our customers and wins recognition of consumers in general.” The new product, N70Z High Plus, is designed to have oversized plates, giving it added power for engine start and more efficient power distribution, as well as longer life of use. With these advantages, the product is tipped to become consumer’s battery of choice.

Adding about marketing campaigns, Mr. Saran said: “We will focus on activities that cover all sales channels across the nation, including battery wholesalers, battery shops, auto parts stores, modern trade channel, and car service centers. We currently have 250 GS Battery shops and we hope to increase that to 300 nationwide within this year. Along with this, we will also carry on with our CRM campaigns for dealers to ensure they are always kept updated about our sales promotions. Under these campaigns, dealers can take benefit of our support for sales growth and market expansion in their areas, such as in-store sales promotional activities and familiarization trips to update them about product knowledge and services. As for end users, we have done and will continue to promote proper battery and engine maintenance through such activities as free battery checkup during long holidays and various special promotions. This will also reinforce the image of GS Battery as the brand of storage battery innovation with international-standard quality.”