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Leaner Loxley gets its act together

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Leaner Loxley gets its act together

By Asina Pornwasin 
THE NATION WEEKEND

 

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Trimming from 50 to 15 companies, the 80-year-old conglomerate is now focused on five strategic business groups

 

The 80-year Thai conglomerate, Loxley, has recently undergone its fourth business transformation in shifting from a telecom business to a service business under its fourth generation leader, Suroj Lamsam. 

 

The company has changed its business direction and reorganised to be lean and highly focused on its new potential.

Once composed of 50 companies under Loxley, it has slimmed down to 15 companies under five strategic business groups (SBG) – information technology, food service and distribution, energy, network solutions, and services.

 

Suroj Lamsam, president of  Loxley Public Company Limited, said the company in the past had too many companies doing many kinds of business, causing a lack of focus that limited its success.

In the two years since he taking over as president of the conglomerate, he has reorganised it and aligned its business units in a new direction to offer “services” across business groups rather than relying primarily on trading products.

 

“We are aiming to shift our core revenue stream to rely on a service or transaction fee model,” explained Suroj.

“Therefore, we need to specialise in each business area that we call a ‘strategic business group’. Now we have five strategic business groups, and are adjusting our approach to focus more on offering ‘service’ in each business.”

 

He said Loxley is now in its fourth generation of business direction, from a trading company to office automation and IT, and then to a telecom before its current services-oriented incarnation.

 

“We need to be lean and to focus on where the business potential lies, rather than running so many businesses without being strong in any one,” said Suroj.

 

Under his lead, Loxley will focus on only five business groups. In each group, the business is heading in the direction of offering services rather than a trading approach. The trading-business model is being disrupted by digital technology, and the company can no longer rely on revenue from that model.

 

“In many of the past years, our revenue was not stable, but swung wildly because most of our businesses relied on revenue from ‘projects’, especially from the government market. Therefore, in the years where we won the projects, our revenue was high. On the other hand, in some years we did not have the projects and our revenue greatly decreased,” said Suroj.

 

In 2019, Loxley aims to have business growth of 20 to 25 per cent above 2018’s around Bt15 billion. 

 

Under Suroj’s direction, each business group has a greater focus on “service”. For example, the IT business previously performed as a system integrator offering hardware and software solution implementation, but now has shifted to offering management services. 

 

Meanwhile, the energy group has announced that it would leave power plant production to be an engineering procurement contractor. Similarly, the network solution group, which mostly relies on winning government projects, will maintain that revenue stream while shifting its focus to specific projects. 

 

“Ideally, we would like to turn to offer ‘service’ to the government. However, we need to maintain this part of the business, which remains our main revenue stream. But we will increase revenue in other businesses with rising potential, especially the services and food industry,” said Suroj.

 

The two main sectors with potential for Loxley are services and food business. Suroj said that the company’s service business will focus on security for both manpower and intelligent systems. The service business is operated by ASM Security Management Company, which has focused on the aviation sector, included air-site security, passenger security, cargo, airline security and so on. 

 

ASM Security Management has around 6,000 employees, with around 3,000 of them in the aviation business and the remainder in other businesses, including the general security guard business. “We are the leader in aviation security, since we have been in this business since Suvarnabhumi Airport opened 14 years ago. We have penetrated almost all the major airports in Thailand except Don Mueang Airport, Samui Airport and Chiang Mai Airport,” said Suroj.

 

As well as offering security for the aviation sector, the company can expand to other services to meet the huge demand in the sector. It is particularly interested in general security guarding services for large corporates such as PTT and Bangchak.

 

And it is also expanding to provide maid and healthcare services. 

 

“Since it is a service business which relies on people, the usual turnover rate is around 10 per cent. Therefore we need other related businesses, recruitment and training businesses, to make sure that we have enough manpower for the 

business,” said Suroj.

 

Under the service group, aviation is the major revenue contributor at around 70 to 80 per cent. Housemaid and other services, including gardening, cleaning and pet control services, together contribute around 20 to 30 per cent to the service group’s revenue.

 

Meanwhile, he said, the food business continues to offer potential for Loxley. The Loxley Trading Company leads this business group, with a long history as a large distributor for consumer foods. It is now expanding into imported food from Japan as well as the WAQ Yakiniku Japanese restaurant. “We abolished and merged companies down from 50 to 15 companies in two years, as well as reorganised the business groups,” said Suroj. “We are confident that we are lean enough. And with the new business direction, we will maintain stable revenues of Bt1.5 billion, avoiding the big swings of past years.”

 

For emerging new startups, he said, Loxley has invested through its K2 Venture Capital. 

 

It also recently set up Travel Ad Network Thailand, which is a travel ad network business. It is Loxley’s latest startup business and includes an overseas partner. 

 

“Loxley is now lean enough to do business during the era of digital disruption,” he proudly summed up.

 

Source: http://www.nationmultimedia.com/detail/Startup_and_IT/30365918

 

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-- © Copyright The Nation 2019-03-17

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It also recently set up Travel Ad Network Thailand, which is a travel ad network business.

 

Seems The Nation has surpassed itself again   🙄

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