Delta Electronics Thailand's President and COO outlines how the company is reshaping strategy to withstand tariff pressures and sustain growth into the long-term.

Bangkok

Delta Electronics Thailand is responding to ongoing tariff challenges by expanding its operations and investing in automation. The company has managed to reduce tariffs from 36 percent to 19 percent, aligning with rates in other ASEAN countries, which helps maintain its competitive position. 

To further mitigate risks, Delta is constructing four new factories in Thailand, with two nearing completion. The expansion is part of a broader strategy to diversify risk, address potential labor shortages, and take advantage of supportive government policies. The company remains focused on maintaining growth momentum and meeting customer demand despite ongoing uncertainties.

Delta Thailand navigates tariff risks with strategic expansion plans

Can you talk to us about how the outlook has now changed because of the tariffs that seems to have at least provided new headaches or new problems for the folks at Delta Electronics to deal with. I think when we are running the business is always a lot of uncertainties and challenges. It happens all the time. But from what we can see is in terms of the tariff it does have some sort of push on some more discussion with our clients as well. Good things what we've seen is from Thailand side of it. It actually managed to reduce from the tariff 36 percent down to the 19 percent which is pretty much on par with the ASEAN countries in that sense. So from our point of view that's OK from our point of view because if you are on par with the rest of the country. So all we need to demonstrate is our capability and also our competitiveness is to make sure we are able to address to the market and also to fulfill the customer's demand. And in the meantime we we do see some of the different things like the OECD people tools and also involved with the tariff etc. So we do have some sort of consideration and make sure we are in good shape and without over enlarge what we expect it would be. So these are the kind of the factors plus the FX exchange. So some of the consideration has been put in there. So you probably doesn't see too much on the profit wise on the growth. But somehow we will try our best to make sure we are maintain that sort of growth momentum. In the meantime which is from the Delta Thailand we also put quite some sort of investment and the expansion in Thailand area as well. Currently in our major locations in Bamboo some of our guy. We do have a currently has about four factories under construction. There'll be two ready before end of this year and another location in this area. We have the well-grown and there's a two facility just about finished. And that would be helping to cope with the demand and the requirement of our customer. Jackie this expansion plan in Thailand. How much of this is a hedge against the tariffs and moving production to a place with lower tariffs and how much of a hedge that provide. Because if I'm not mistaken Thailand's tariffs of 19 percent or just one percentage point lower than that of Taiwan's. Can you talk to us about whether or not this is a hedge play with regards to your expansion in Thailand. Sir. Yeah I think it's the Thailand side of it which is we do see we continue moving into the with some more automations in our factories. So try to mitigate about the cost of the labors and the things to increasing continually. And also some sort of preparation for the shortage of the labor as well. And overall what we've seen is that this sort of the planning is mainly on the risk of mitigations. We want to make sure that not all the eggs in the same basket. And we are also continue to see Thailand in terms of the infrastructures in terms of the government support. We do see a very positive and friendly support and the more kind of the consideration to asking Delta to be continuously invest in Thailand as well which is from our point of view. We do think that this is very good and also progressing in this sort of directions. So in terms of the tariff I don't think that there will be too much big concern as what I mentioned previously because if we are about the same and in that sense is at least our standing point is similar to the others. So we could still continuously to provide and support to our customer without too much issue.

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Breakdown