OCEAN to Cease Trading Business of Accessories-Faucet Products due to Business Decline
OCEAN has announced the cessation of trading business of accessories and faucet products from Nov. 1 due to a decline in the business.
Ocean Commerce Public Company Limited (OCEAN) has made an announcement that its Board of Directors resolved to grant approval for the cessation of trading business of accessories and faucet products from November 1, 2019 onwards.
OCEAN states that according to the resolution of the Board of Directors’ Meeting and the 2019 Annual General Meeting of the Shareholders, OCEAN had disposed non-operating assets and/or assets relating to the manufacturing business of accessories and faucet products on April 25, 2019, but still operates the trading business of accessories and faucet products.
However, the operational performance of the trading business of OCEAN has been declining and limitation of business operation with following details.
In 2016 – 2018, the Trading Business had revenues of THB 307.6 mm, THB 277.3 mm, and THB 289.7 mm respectively or compound annual growth rate of (3.0%) per year.
OCEAN has started the trading of crude palm oil type A (Trading CPOA) in October 2018 onward resulting in the portion of Trading Business has been decreasing from 94.3% of the total revenues in 2017 to 47.2% of the total revenues in 2018 and to 13.9% of the total revenues in 6M2019.
In addition, Managing Director – Faucet Business has retired since September 16, 2019 which affect the operation and communication with number of staff. The Trading Business requires number of staff to present the products at selling presets such as department stores and modern trades.
As of December 31, 2018 and June 30, 2019, OCEAN had the staff of Trading Business of 245 staff and 260 staff respectively with expenses of 20% – 25% of the revenues of Trading Business. The number of staff increase the limitation on business operation, business monitoring, and business continuity.
In this regard, OCEAN considered it appropriate to cease trading business of accessories and faucet products from November 1, 2019 onwards. The cessation was to increase OCEAN’s liquidity and cash flows.