Sustainable Development Framework

Sustainability Strategy

In 2025, the global and Thai economies reached a critical turning point, significantly impacting the furniture industry structure. Modernform has identified four key drivers and pressures:

1. Macro-Economic Landscape: Despite signs of global recovery from interest rate adjustments, volatility in energy prices and raw material costs remains a risk to profit margins. The Thai economy shows a K-Shaped Recovery, where high-end real estate and Premium Office Spaces continue to demand high-quality, functional, and uniquely designed furniture.
2. Regulatory & Climate Pressure: The transition into the “Global Boiling” era has made climate issues a significant trade barrier. Stringent regulations, such as the Carbon Border Adjustment Mechanism (CBAM) and rigorous sustainability disclosure standards from FTSE Russell and the SEC, compel manufacturers to transition toward low-carbon production and prioritize 100% Traceability of raw materials.
3. Digital & AI Transformation: AI and automation are no longer just tools for efficiency but are the heart of Supply Chain Optimization and Omni-channel customer experiences. The industry is shifting from traditional “Manufacturing” toward “Tech-Driven Living Solutions.”
4. Well-being & Sustainable Consumerism: Modern consumers prioritize well-being in their workspaces and homes. Products must be chemical-free and embrace the Circular Economy. Purchasing decisions have shifted from price and design to “Value” and the “Social Responsibility” of the brand.

These challenges drive Modernform to be more than a manufacturer; we are a leader in “Designing Our Tomorrow,” balancing Progress (Business Growth), Resilience (Risk Adaptability), and Well-being for long-term sustainable growth.

Sustainability Strategy: From Vision to Action

By monitoring trends, impacts, and changes across various factors, the Company has defined a strategic direction for the furniture business that focuses on key strategic pillars. This serves as a comprehensive, long-term operational plan that integrates all dimensions of the business to achieve our established goals and vision as follows:

1. Strategic Pillar: Value Chain-Based Restructuring

In 2025, the Company implemented a major organizational restructuring strategy to accommodate global shifts. The core of this transformation is the reduction of complexity, the establishment of unified standards, and a focus on innovation throughout the value chain. This involves transitioning from fragmented, siloed operations toward integrated collaboration based on the customer value creation process (End-to-End Solution), with key highlights as follows:

1.1 Value Chain-Based Grouping: Reorganizing work functions into six systematically linked core business groups to fulfill the strategies of Operational Excellence and Turnkey Services.

1.2 Seamless Design & Brand Integration: Integrating marketing and design functions to work collaboratively, merging creativity with deep consumer insights. This ensures that products accurately meet market demands, increases sales opportunities, and creates a distinctive brand identity, ultimately resulting in sustainable brand impressions and superior customer experiences.

1.3 Production Consolidation: Merging production lines into a single, unified operation to create Economies of Scale and flexibility in production capacity management. This reduces resource redundancy, enhances quality control capabilities, and helps lower overall energy consumption, directly aligning with our clearly measurable greenhouse gas (GHG) reduction targets.

1.4 Centralized Procurement & Sustainable Sourcing: Consolidating procurement units from all areas into a single department to manage product costs, which represent a primary business risk. This enables the Company to implement uniform Sustainable Sourcing standards across the entire organization, while also serving as a strategic measure to mitigate raw material cost volatility and environmental risks.

1.5 Elevating Production through First Time Quality & Operational Excellence: Improving factory operational processes to focus on delivering accurate and precise products from the first attempt. This reduces waste rates and rework, which are significant burdens on both operational costs and the environment. Furthermore, this includes transitioning from Quality Control (QC) to Quality Management (QM), shifting the focus from "defect detection" to "Prevention and Advance Quality Planning" across the organization to foster long-term sustainability.

1.6 Transforming Human Resources into Human Capital Management (HCM): Transitioning from traditional human resource management to the management of intellectual capital. This reinforces our conviction that “People” are the most valuable assets in designing the future and are our most critical stakeholders.

1.7 Establishing the Project Management Unit: Creating a dedicated Project Management function to ensure the organization operates systematically, reduces errors, and increases efficiency. This unit ensures that the delivery of End-to-End living and working spaces is professional and error-free, while supporting the Turnkey Services strategy, which is a new strategic goal for the Company.

Additionally, the Company has established the Business Process Improvement (BPI) unit to serve as a primary driver for continuous operational process improvements. By utilizing data and technology as leading tools, this ensures organizational agility and maintains our competitiveness within the "Global Boiling" era.

2. Competitiveness Enhancement Strategy

2.1 Innovation and Differentiation:

Transitioning from a furniture manufacturer to a leader in Living Solutions. We are elevating our design standards by moving beyond mere aesthetics to focus on “Thoughtful Design.” By leveraging Customer Relationship Management (CRM) data and Artificial Intelligence (AI), we analyze consumer behaviors to create products that deliver Personalization and enhance the Well-being of residents. Furthermore, we are advancing Eco-Innovation, which utilizes circular materials and low-carbon production processes as the core pillars of our competitive differentiation.

2.2 Elevating the Organization toward Operational Excellence:

To become the #1 brand in the hearts of our customers and establish a sustainable competitive advantage, the Company has continuously enhanced operational efficiency. This involves streamlining work processes for greater agility and adopting digital technologies to reduce costs. We are shifting from “Price Competition” to “Value Competition,” utilizing the 2025 Value Chain-Based Restructuring as our primary strategic tool. Our newly established Business Process Improvement (BPI) unit spearheads Lean Management and process optimization, eliminating non-value-added steps to accelerate time-to-market. The Company adheres to the following core principles for organizational elevation:

2.2.1 Continuous Improvement: Constantly refining all aspects of operations.

2.2.2 Waste Elimination: Removing inefficiencies in work processes to achieve faster, better, and more cost-effective results.

2.2.3 People Engagement: Empowering operational staff (Empowerment) to actively participate in identifying and resolving operational challenges.

2.2.4 Data-Driven Decision Making: Prioritizing evidence-based analytical insights over intuition in the decision-making process.

2.2.5 Standardization: Establishing clear operational standards to ensure consistent and reliable performance outcomes.

2.3 Building Trust and Comprehensive Turnkey Services (Trusted Expert & Turnkey Service):

The Company is elevating its sales model from selling furniture to becoming a comprehensive design and decoration consultancy (Turnkey Services). Driven by our new Project Management unit, we aim to reduce complexity for customers and create value-added services. This is coupled with our ISO/IEC 27001 certification, which serves as a vital tool in building confidence regarding Customer Data Protection and secure online transactions—a critical decision-making factor in the digital economy.

3. Sustainability Strategy toward becoming a Low Carbon & Innovative Organization

To achieve our vision of being the most preferred brand among designers and consumers, Modernform has defined a strategic plan that concretely integrates Economic, Social, and Environmental (ESG) dimensions into our business direction as follows:

3.1 Greenhouse Gas (GHG) Emissions Reduction: Committed to mitigating atmospheric impacts by reducing GHG emissions across all business processes, including product development, manufacturing, marketing, and sales.

3.2 Promoting a Circular Economy: Maximizing resource efficiency and striving toward a Zero Waste goal.

3.3 Building Awareness: Enhancing the understanding of sustainability and fostering active engagement among all stakeholder groups.

Modernform Corporate Strategy 2025

In 2025, the Company defined its corporate strategy to align with the primary goal of being “The most preferred Thai furniture brand among designers, homeowners, and business owners.” This is achieved by striving to be the best furniture manufacturer and a trusted expert for customers, offering reasonable prices alongside superior service value. We remain focused on reinforcing our brand awareness as the number one brand in Thailand, as evidenced by our performance.

From the aforementioned strategic framework, the Company’s business direction is to transform future spaces that seamlessly blend work and life through designs that inspire and address every customer need. Four key strategic approaches serve as essential tools for our operations: