TNR buys PLAYBOY brand rights for condoms worldwide Moves up to world class level producer and expects jump in 2018 sales

Business Press Releases Tuesday April 10, 2018 12:58
Bangkok--10 Apr--MT Multimedia

Thai Nippon Rubber Industry PCL or TNR, the largest producer and distributor of condoms produced from natural rubber in Thailand and related products under the ONETOUCH(TM) and Niptex(TM) brands, embarks on a great expansion of its business after its board approved the purchase of the rights to sell and market 'PLAYBOY' brand condoms and lubricant gels worldwide. TNR is taking over from United Medical Devices (UMD), holder of the licence from Playboy Enterprises International, LLC, USA, with an investment of US$15 million. Giving the company the rights to market the PLAYBOY Brand of Condom and lubricant gel in 188 countries worldwide of which UMD already has a client base in 34 Countries. TNR expects that in the first year it will earn 138 million baht in revenue from the production and sales of products to boost its 2018 sales. The company is also planning to join hands with partners in each country to develop their markets and increase revenues.

Mr. Amorn Dararattanaroj Chief Executive Officer of Thai Nippon Rubber Industry Plc (TNR), the largest producer and distributor of condoms produced from natural rubber in Thailand and related products under the ONETOUCH(TM) and Niptex(TM) brands, revealed that on April 9, 2018 the company's Board of Directors gave approval for the purchase of the rights to sell and market 'PLAYBOY' brand condoms and lubricant gels worldwide. TNR is taking over from United Medical Devices or UMD which holds the licence from Playboy Enterprises International, LLC, USA. TNR hired BakerMckenzie, its legal advisor, to draft the contract that will result in the company gaining the rights to sell and market condoms and lubricant gels of the PLAYBOY brand worldwide for a period of 10 years. The contract will be automatically renewed every year according to the rights specified under it. TNR has thus far only been the producer of PLAYBOY condoms and distribution representative of UMD in Thailand.

TNR's purchase of license rights from UMD will give the company the rights to sale and market condom and lubricant gel under the PLAYBOY brand in 188 Countries worldwide of which UMD has Already been marketing the products in 34 countries. Which an investment of not more than US Dollar 15 million or about 471 million baht, the company's studies showed that this purchase of license rights will generate and internal rate of return (IRR) of at least 15% (Calculated from UMD's client base in 34 countries at present). The investment will benefit the company's total sale revenue, which is expected to grow 30% this year from the 1,294 million baht revenue last year.

"The company has been the producer of condoms under the PLAYBOY brand for the clients of UMD for a long time and was also the distributor of the PLAYBOY brand of condoms in Thailand. That is why we see the growth potential and opportunity to expand our market at the global level and entered into negotiations with UMD to buy its contractual rights and with Playboy Enterprises International, LLC, USA. PLAYBOY trusts and is confident in our ability, both in the production quality and marketing side, and decided to transfer the rights to TNR. This decision will give TNR better business potentials because after getting PLAYBOY the brand can be used to boost its marketing efforts which at present are focused around its own ONETOUCH(TM) and Niptex(TM) products. PLAYBOY is considered a leading global brand with a long history and good brand recognition by consumers worldwide. This will have a good effect on our effort to expand foreign markets and will also give the company more sales of products under its own brands," Mr Amorn said.

The TNR CEO said that from now on the marketing plan is to position the PLAYBOY brand overseas in the upper market, the ONETOUCH(TM) brand in the upper-middle market and the Niptex(TM) brand in the middle market, which at present is distributed only in Vietnam. This plan will give the company products in many market segments and after concluding the purchase of the licence from UMD, TNR will organise teams to help foreign trade partners with sales and marketing in their countries. We will be a trading partner that gives marketing support and jointly develop the market seriously in an effort to increase sales in each country.

At the same time TNR plans to develop new condom products under the PLAYBOY brand to answer the demands of consumers abroad. It is also preparing plans to develop and increase revenue from the production and distribution of lubricant gels under the PLAYBOY brand that has plenty of marketing opportunities.

Details of the company's acquisition of assets

On April 9, 2018 the Board of Directors gave approval for the company to enter into a contract to buy licence rights with the United Medical Devices, LLC (UMD). The licence agreement includes (1) the transfer of UMD's rights and duties under the Product Licence Agreement between UMD and Playboy Enterprises International, LLC (PLAYBOY) to sell and market condoms and lubricant gels under the trademark PLAYBOY in 188 countries throughout the world and (2) assume the rights of UMD under the Sub-licence Agreement drawn up between UMD as the sub-licence holder to produce and distribute products in each country (a total of 34 countries) and TNR as sub-licence receiver. The value of the project will total no more than US$15 million or no more than 470,565,000 baht.

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