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price and may have to reduce the price of goods in order industry have a direct variation. If the two industries
to compete in some circumstance. If Aeroflex group of decelerated and resulted in the decline in construction of
companies did not consider price reduction in order to buildings and offices as it had happened in 1997 - 1999,
compete, it could result in the decline of Aeroflex group of such event would materially affect the operation of Aeroflex
companies’ operating result due to decrease in product group of companies. Despite the fact that the two industries
sales, and a loss condition when the competitors have influence on the operation of Aeroflex group of
considered implementation of competitive pricing policy companies, the effect is less in comparison to that of the two
for long continuous period. industries which have higher volatility., This is because
However, Aeroflex group of companies’ products have Aeroflex group’s products have been used in replacement
prominent properties when comparing to competitors such market or in reparation of office buildings. During fiscal year
as thermal insulation factors, temperature resistant range, ended between 2012 - 2015, Aeroflex group’s sales to
moisture permeability and flammability. With said prominent replacement market accounted for 20-30%. In addition,
properties, Aeroflex group of companies’ products are still constant development and innovation by Aeroflex group
in demand by particular group of customers who are not make it possible to develop thermal insulation for roof and
price sensitive despite the use of competitive pricing policy acoustic board of better quality than the products that are in
to compete by the competitors. This is because not only common usage. As a result, Aeroflex group of companies
competitors’ goods are made from other substance, but have additional revenue from changing the use of products
also Aeroflex brand in Thailand and across the world is in use by consumers without the need to rely solely on
defined goods with features that design engineers specify construction and real estate industry.
in the projects thereof. In addition, Aeroflex group of Risks from expansion of investment and production
companies have introduced Celflex to be a secondary capacity overseas
brand to compete with products from competitors, price- The cost of transporting products is considered an important
wise. operating expense since the size of Aeroflex’s goods is large
Special properties of EPDM which are specific proprietary in comparison to its weight and requires large transportation
technology of Aeroflex group of comopanies enables the space. For this reason, Aeroflex Company needs to set up
production of pre-foam tubes and sheets or semi-finished production facilities in different parts of the world to increase
products which help to reduce cost of production and efficiency in transportation in terms of related costs and time
transportation and result in variety of products’ sizes in transit. However, setting up production facilities in different
available for sales in different countries. Said advantage parts of the world or in inexperienced locations may result in
is one of important factors that customers choose Aeroflex Aeroflex group of companies’ losses in addition to production
group of companies’ products over competitors who in secret being exposed to the competitors rendering them to
some case cannot deliver goods within period required by produce similar products and compete with Aeroflex group
customers. of companies.
Risks from dependency on construction and real estate However, Aeroflex group of companies are aware of risks
industry from overseas investment. To be prudent, they have taken
Aeroflex group of companies’ thermal insulation products are into account different types of investment such as joint
classified as a construction materials in which the consumption ventures and licensing with trading partners. Doing so will
demand of said products and construction and real estate lower the risks from investing solely by the company. Having
good trading partners overseas can help to ensure quick
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