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Risks from damages as a result of problem in product’s subsidiaries or affiliated companies would not be protected
quality by law anymore. As a result, competitors can manufacture,
Thailand and most other countries in the world have laws compete, and materially affect the decline of the company’s
stipulated for the incurrence of damages due to unsafe operating result or incur the stage of loss to the company.
products or poor quality. Such laws stipulate for the The Company is aware of such risks. Therefore, the
manufacturers to be responsible parties of any damages, corporate group have employed professional legal advisor
regardless whether such actions are intentional or the result who specializes in patent law to; take care of various
of negligence. Thus, if customers file lawsuit against patents in order to prevent aforementioned event, research
products made by subsidiaries or affiliated companies, the products with better features and performance,
such class action may result in joint-responsibility by register additionalpatents and petty patents to extend the
subsidiaries or affiliated companies. Besides damages protection period of important patents that are about to
caused by subsidiaries or affiliated companies whether expire for another 10-20 years, and maintain good
such actions are intentional or the result of negligence, r, relationship with customers while highlighting the premium
customers of subsidiaries or affiliated companies may quality of products to prevent competitors from competing
consider cancellation of future business transactions which with ease. Even though, the patents are already expired,
will cause the decline in operating result and incur stage competitors cannot easily make similar products to those
of loss. In addition to such fallibility, repercussive effects of the company and subsidiaries since the products made
resulting in negative image of the subsidiaries or affiliated by the company and subsidiaries require advanced
companies will affect future turnovers of the subsidiaries production technology including the installation of world
or affiliated companies. class modern high speed system of machines. As a result,
Nonetheless, subsidiaries or affiliated companies have it is difficult to have manufacturers with similar caliber in
never encountered such events since their inception. competition.
Subsidiaries and affiliated companies are aware of the In addition, the corporate group continue to; create and
significance of such risks. Hence, preventive measures develop new products in order to present to customers,
have been implemented at the root cause by developing register patent to protect and prohibit competition from
quality control system continuously under certification of competitors , and strengthen future sustainable the growth
quality system; ISO 9001, ISO14001, OHSAS18001,TIS18001, of corporate group’s revenue and operating result with.
ISO/TSI16949, Q1(Ford), GMP and HACCP. Furthermore,
our oversea subsidiaries in USA and Australia have product Risks from business operation related to thermal
liability insurance to provide coverage against any insulation
damaged products.
Risks from expiration of subsidiaries/affiliated companies’ Risks from the use of competitive pricing strategy to
patents compete by competitors
Currently, the company’s incomes derived from The Elastomeric Thermal Insulation industry where Aeroflex
manufacturing and distribution of products with patents group of companies operate has few players. The world
under its subsidiaries account for more than 20% of total major manufacturers include Armacell (USA), K-Flex (Italy)
income. Such products are protected by law to prohibit and Aeroflex (Thailand). In the past, the level of competition
competitors from copying the production and competing was moderate and severe in some regions. In some case,
with the company. However, if subsidiaries or affiliated competitors may reduce price of goods in order to gain
companies’ patents expire, the products made by more market shares. As a result, Aeroflex group of
companies could not sell their goods at original specified
59Eastern Polymer Group Public Company Limited
