Fibre King Oryx Automation - Case Study
From the Asialink Business Thailand Country Starter Pack
When Fibre King Oryx Automation looked at expanding its manufacturing overseas, TAFTA helped it settled on Thailand.
When Fibre King Oryx Automation looked at expanding its manufacturing overseas to escape the effects of the global financial crisis and a strong Australian dollar, the Thailand-Australia Free Trade Agreement (TAFTA) helped it settle on Thailand. "TAFTA was one of the main reasons we chose Thailand over somewhere like Malaysia or southern China," says managing director Suren Moodley.
The company designs and builds end-of-line automated packaging machinery, including case conveyers, case packers and palletising systems. The 89-year-old Brisbane-based parent company Fibre King set up a subsidiary company – Oryx Automation – in Thailand in 2012, and is now established with 80 staff in an industrial estate 130 kilometres southeast of Bangkok.
"At that time, most of the machinery we were building was getting imported into Australia, as well as spare parts for machinery already in the field. We now have TAFTA certification on all our parts and machinery imported into Australia, avoiding any import duties in Australia."
"The only challenge with TAFTA is that in Thailand it's not as easy as Australia to get your certification (COO – Certificate of Origin) to qualify for TAFTA benefits. It isn't difficult, just very, very paper intensive. You simply need people to do the paperwork demonstrating the required Thai value add."
"It's very, very difficult to attract good talent outside Bangkok."
Like other parts of Asia, establishing a business in Thailand comes with constant challenges associated with talent and retention of staff. Oryx Automation builds highly customised engineered products so skilled technical staff are vital – however finding and keeping such highly skilled employees is no easy task.
"It's very, very difficult to attract good talent outside of Bangkok," says Moodley. "Thais are very social people, they put a high value on social life and family structures so to get them to move out of Bangkok is nigh on impossible."
"Also, because of the rapidly emerging industry here creating new jobs, it's really hard to hold on to staff. You employ people, train them, then someone else poaches them. But we identified this issue early on and our staff retention policies are working really well."
One of the strategies is splitting the traditional bonus system. Most companies pay a big, pro-rata bonus at the end of each year in Thailand. But Oryx Automation also provides a loyalty bonus half-way through the year with no pro rata condition.
"The estate we are in is known as the Detroit of the East. Nevertheless, we have managed to retain all our key staff despite the lure of large multinationals who tend to attract the best people."
"It takes about two years to develop someone to be a really good technician," says Moodley. "Therefore staff retention and loyalty is really important to our success."
Moodley and his management team also recognised the importance Thais place on building and maintaining relationships in their collective society. "The other thing that has helped, though this was not deliberate, is that all the five expatriates based here engage very actively with staff outside of work. We play football, play badminton, attend weddings and celebrate traditions like Songkran (Thai New Year).
"Forget the money, forget bonuses, the biggest thing is engaging people and taking in their culture, understanding their values and their families, their lives, playing their sport and enjoying their social stuff, and then you’ve got them on side because you value them."
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