The 30yearold company also announced a major business reorganisation to deal with the appreciation of the baht, including a costreduction programme for its manufacturing facility. The company plans to double the size of its domestic business next year.

Wichai Taytiwat, managing director of Plan Creations, said preparations were underway for construction of the biomass gasification and power generation plant on 30 rai (4.8 hectares) near its toy factory. Construction would start by the end of this month and the plant would start operation by next November. It will be able to generate about 5 megawatts of electricity per day.

“We will be able to produce electricity to supply our own factory as well as selling it to the local electricity authority,” Wichai said.

The company expects to earn between Bt70 million and Bt80 million annually from selling power to the local electricity authority. The plant will consume about 120 tonnes of sawdust and tree root a day.

He said Plan Creations’ toy factory created about 85 tonnes of sawdust a day from its production process. Other sawdust and tree root for biomass gasification would be purchased from local sawmills located in the area.

“We expect the plant will help the company save electricity costs in the next seven to eight years,” Wichai said.

The factory now racks up an electricity bill of Bt1.5 million per month, or between Bt15 million and Bt18 million per year.

Plan Creations exports 95 per cent of the wooden educational toys made at the factory to 65 countries. Only 5 per cent of the products are sold domestically in selected department stores.

Wichai said the factory had been hit by the appreciation of the baht, which has strengthened by more than 10 per cent so far this year. This was because 100 per cent of the raw materials used by the factory, especially rubbertree wood, were sourced locally in Trang province, he said.

The factory consumes about 1,000 tonnes of rubbertree wood per year in its production process.

Wichai said that besides such financial instruments as foreignexchange options and forward exchange to fight against the external factor of currency fluctuation, the company had developed efficiency measures at its Trang factory.

“To deal with the baht’s appreciation, we have shortened our manufacturing process. The manufacturing facility itself will be more automated,” he said.

Wichai expects that with the revised production process, the factory will be able to reduce its costs by 810 per cent by the middle of next year.

He said that two years ago, the company invested about Bt300 million on expanding the capacity of its factory, from 3 million wooden toys per year to 5 million. The expansion was to serve greater demand for wooden educational toys both domestically and abroad in the next four to five years.

“We have also adjusted the design process for our wooden toys to be faster and give higher value to customers,” Wichai said.

Previously, the company launched about 30 new toy designs once a year. The company over the past two years has speeded up newproduct launches to twice a year, with between 40 and 50 new designs being introduced altogether.

“We will also focus more on the domestic market with a plan to double our domestic business from the current 5 per cent of total sales to about 10 per cent by the end of next year,” Wichai said. “We plan to make an official launch of a new product lineup, ‘Plan Education’, both domestically and internationally in January. The new lineup will be targeted and directly at local and international schools in Thailand.”

He said that Plan Creations expected to grow its sales by 15 per cent to about US$16 million (Bt477 million) this year.

“We also want to grow our sales by another 20 per cent next year, driven by the export expansion of wooden toy products into South America, especially Brazil and Chile.”