The speculative-grade corporate bond market has made a sharp turnaround from earlier in the year, said an article published today by Standard & Poor's, titled "U.S. Speculative-Grade Spreads Sector Index Review: Prices Might Be Ahead Of Fundamentals (Premium)."
"The spread on Standard & Poor's speculative-grade bond index has tightened 947 basis points this year to 700 basis points as of Nov. 12, and high-yield bond returns have eclipsed 50%," said Diane Vazza, head of Standard & Poor's Global Fixed Income Research Group.
Credit quality has begun to stabilize, albeit at a very weak level. Downgrades have slowed considerably, falling to 106 in the third quarter of 2009 from 241 in the first quarter and 210 in the second quarter.
"Credit metrics, such as debt to EBITDA and interest coverage, are likely at or near the cyclical bottom. However, rapid improvement would take a surge in top-line growth, which we believe is unlikely to happen this year," said Ms. Vazza. "We expect fundamentals to remain weak for speculative-grade-rated companies in 2010."
Sectors with high leverage and low interest coverage levels such as forest products and building materials, automotive, capital goods, and media and entertainment have the highest risk premiums.
Spreads have tightened across all sectors, with some sectors, such as automotive, experiencing significant tightening, more so a result of the removal of defaulted issues from the pool rather than an increase in bond prices in the sector.
This article is part of our premium Global Fixed Income Research content, which is available to premium subscribers to RatingsDirect on the Global Credit Portal at www.globalcreditportal.com and to RatingsDirect at www.ratingsdirect.com. Ratings information can also be found on Standard & Poor's public Web site by using the Ratings search box located in the left column at www.standardandpoors.com. Members of the media may request a copy of this report by contacting the media representative provided.
Thursday, November 19, 2009
Sunday, November 8, 2009
Steel product makers fear Afta influx
Steel and stainless steel product manufacturers have called for measures to protect local businesses, at risk from the elimination of import tariffs under the Asean Free Trade Agreement (Afta)in January.
Once the import tariff is removed,cheaper steel and stainless steel products, mostly from China, are expected to flood into the local market.
Ekachai Youngvanich, vice-chairman of the executive committee of Satien Stainless Steel Plc and a member of the Federation of Thai Industries' steel club,said several steel and stainless steel companies had discussed the potential impact and how to tackle the problem.
"The government should help us and protect the local industry. We're worried that independent importers will bring in low-quality kitchenware products to Thailand. The market will get more intense and consumers will not be safe using these products," he said.
Satien Steel Kitchenware, the maker of Zebra kitchen products, aims to avoid tough competition by shifting to focus on premium products.
But governments in many Southeast Asian countries have already implemented measures to protect their manufacturers, which makes it harder for Thai companies to export to these markets.
For example, Malaysia has already set up the Malaysian Industrial Standards Institute to test imported Thai stainless-steel tubes.
"We think our company will get a positive effect when exporting products to Asean. The non-trade barrier will make our price go down, so we can sell 5% to 10% more products," said Mr Ekachai.
Purchasing power for stainless kitchenware products has improved both locally and overseas at the moment, he said. The company has had more export orders from the United States, Europe and Australia.
The company will therefore open its new 200-million-baht production facility at its Rayong factory by the middle of next year. This will raise production capacity by 10-15% from the current 6,000 tonnes per year, and should enable the company to meet demand over the next five years.
About 70% of production will serve the domestic market and the rest exports.
Sales of Satien Stainless Steel last year were at 1.2 billion baht. They are expected to increase by 5-7% this year,less than last year's double-digit growth due to the downturn and the H1N1 flu outbreak. Demand for stainless-steel kitchenware from hotels and restaurants has also fallen in line with the slump in tourism.
Mr Ekachai said demand for Satien's kitchenware will increase by 7-10% next year because of the rebound. The company aims to achieve annual sales of 1.5 billion baht within the next five years.
Once the import tariff is removed,cheaper steel and stainless steel products, mostly from China, are expected to flood into the local market.
Ekachai Youngvanich, vice-chairman of the executive committee of Satien Stainless Steel Plc and a member of the Federation of Thai Industries' steel club,said several steel and stainless steel companies had discussed the potential impact and how to tackle the problem.
"The government should help us and protect the local industry. We're worried that independent importers will bring in low-quality kitchenware products to Thailand. The market will get more intense and consumers will not be safe using these products," he said.
Satien Steel Kitchenware, the maker of Zebra kitchen products, aims to avoid tough competition by shifting to focus on premium products.
But governments in many Southeast Asian countries have already implemented measures to protect their manufacturers, which makes it harder for Thai companies to export to these markets.
For example, Malaysia has already set up the Malaysian Industrial Standards Institute to test imported Thai stainless-steel tubes.
"We think our company will get a positive effect when exporting products to Asean. The non-trade barrier will make our price go down, so we can sell 5% to 10% more products," said Mr Ekachai.
Purchasing power for stainless kitchenware products has improved both locally and overseas at the moment, he said. The company has had more export orders from the United States, Europe and Australia.
The company will therefore open its new 200-million-baht production facility at its Rayong factory by the middle of next year. This will raise production capacity by 10-15% from the current 6,000 tonnes per year, and should enable the company to meet demand over the next five years.
About 70% of production will serve the domestic market and the rest exports.
Sales of Satien Stainless Steel last year were at 1.2 billion baht. They are expected to increase by 5-7% this year,less than last year's double-digit growth due to the downturn and the H1N1 flu outbreak. Demand for stainless-steel kitchenware from hotels and restaurants has also fallen in line with the slump in tourism.
Mr Ekachai said demand for Satien's kitchenware will increase by 7-10% next year because of the rebound. The company aims to achieve annual sales of 1.5 billion baht within the next five years.
Wednesday, November 4, 2009
SCG PAPER TURNS TO ALTERNATIVE PULP MATERIALS
SCG Paper is resorting to other materials for paper pulp-making, to ease the expected increase in global waste paper prices due to higher demand from China.
President Chaovalit Ekabut said that the other materials for pulp-making, would offer the same quality as waste paper. Importantly, the production cost should be lower than when using waste paper to be imported from the United States.
The paper unit of the Siam Cement Group expects the global demand for waste paper next year to increase due to the business resumption of paper manufacturers in China.
Chaovalit said several Chinese paper manufacturers have resumed their operations after suspensions during the economic crisis. Those companies will have to order waste paper from the US, which is the largest supplier.
The move of Chinese paper-makers might affect other paper manufacturers including SCG Paper because the company is one of those that purchases scrap paper from the US to be made into new paper products.
Chinese paper manufacturers are expected to order a lot of scrap paper. They are expected to produce 2 million tonnes next year.
Chavalit said the company has to reduce risk from the expected shortage of scrap paper by considering using another material that is not made from scrap paper, such as weeds.
Other material prices should be lower than scrap paper, he said.
He said that the resumption of Chinese paper manufacturing has driven scrap paper prices up from the current level of between US$160 (Bt5,350) and $170 per tonne.
However, the scrap paper price is not expected to increase to $250 like in 2008, because of the low paper consumption of the US. The low consumption in the US is in line with the country's economic crisis. The consumption of paper this year dropped by 30 per cent.
In addition, the company believes the economic situation has bottomed out because sales revenue and net profit in the third quarter improved from the second quarter, he said.
SCG paper earned sales revenue of Bt11.23 billion, up 6 per cent from the second quarter while net |profit increased by 10 per cent to Bt701 million from the last quarter and increased 13 per cent year on year.
Chavalit noted that the pick up of sales revenue in the third quarter might help the total sales revenue this year meet flat growth or drop a little from last year's Bt47 billion. The company earlier predicted a plunge in sales in 2009 due to the crisis.
He said that the company outlook next year should be brighter because it will realise full revenue from a new paper craft plant in Vietnam. The company expected the plant in Vietnam would contribute Bt2.5 billion in sales revenue next year.
Chavalit added that besides the new plant in Vietnam, the company is ready for new investment. One of SCG Paper's investments is the merger and acquisition of paper plants in Thailand and overseas.
He could not reveal the investment budget for M&A, but said the M&As should be seen soon.
President Chaovalit Ekabut said that the other materials for pulp-making, would offer the same quality as waste paper. Importantly, the production cost should be lower than when using waste paper to be imported from the United States.
The paper unit of the Siam Cement Group expects the global demand for waste paper next year to increase due to the business resumption of paper manufacturers in China.
Chaovalit said several Chinese paper manufacturers have resumed their operations after suspensions during the economic crisis. Those companies will have to order waste paper from the US, which is the largest supplier.
The move of Chinese paper-makers might affect other paper manufacturers including SCG Paper because the company is one of those that purchases scrap paper from the US to be made into new paper products.
Chinese paper manufacturers are expected to order a lot of scrap paper. They are expected to produce 2 million tonnes next year.
Chavalit said the company has to reduce risk from the expected shortage of scrap paper by considering using another material that is not made from scrap paper, such as weeds.
Other material prices should be lower than scrap paper, he said.
He said that the resumption of Chinese paper manufacturing has driven scrap paper prices up from the current level of between US$160 (Bt5,350) and $170 per tonne.
However, the scrap paper price is not expected to increase to $250 like in 2008, because of the low paper consumption of the US. The low consumption in the US is in line with the country's economic crisis. The consumption of paper this year dropped by 30 per cent.
In addition, the company believes the economic situation has bottomed out because sales revenue and net profit in the third quarter improved from the second quarter, he said.
SCG paper earned sales revenue of Bt11.23 billion, up 6 per cent from the second quarter while net |profit increased by 10 per cent to Bt701 million from the last quarter and increased 13 per cent year on year.
Chavalit noted that the pick up of sales revenue in the third quarter might help the total sales revenue this year meet flat growth or drop a little from last year's Bt47 billion. The company earlier predicted a plunge in sales in 2009 due to the crisis.
He said that the company outlook next year should be brighter because it will realise full revenue from a new paper craft plant in Vietnam. The company expected the plant in Vietnam would contribute Bt2.5 billion in sales revenue next year.
Chavalit added that besides the new plant in Vietnam, the company is ready for new investment. One of SCG Paper's investments is the merger and acquisition of paper plants in Thailand and overseas.
He could not reveal the investment budget for M&A, but said the M&As should be seen soon.
Wednesday, October 28, 2009
MAKERS OF BUILDING MATERIALS "BIGGEST GAINERS"
The building material, steel, downstream petrochemicals, auto parts and discountstore sectors will benfit from the government's second economic stimulus package, according to a research paper by SCB Securities.
Firms making building materials are expected to reap the biggest gains from the Thai Khemkhaeng (Invest for Strength) scheme phase I, worth Bt200 billion.
About Bt59 billion of the Bt200billion package will be used to develop small reservoirs and repair irrigation systems, and PVC manufacturers such as Thai Plastic and Chemicals and Vinythai will enjoy the benefits.
The brokerage said another Bt35 billion would be allocated for building and repairing roads, boosting asphalt demand and benefiting Tipco Asphalt.
Tata Steel (Thailand) and G Steel will also be beneficiaries from the stimulus package, as steel bar and wire will be major raw materials in construction works related to irrigation systems, hospitals and electric trains, SCB Securities said.
However, the brokerage is nor sure whether Sahaviriya Steel will also gain, as PVCpipe prices and maintenance costs are lower than those for steel pipelines.
Cement-makers Siam Cement, Siam City Cement and TPI Polene are other expected gainers in the buildingmaterials sector.
The brokerage estimates that the 10-12 electricrail routes will need 9 million10 million tonnes of cement.
"It is too early to calculate cement demand for all the routes, but the Purple, Red and Blue lines alone will create 2.53 million tonnes of cement consumption over their fouryear construction periods," the paper said.
For the consumption sector, Big C Supercentre and Siam Makro will be winners from the Thai Khemkhaeng programme, as about Bt20 billion will be allocated to village funds.
From the previous village funds' budget in fiscal years 20042005, Big C and Makro reported sales growth in existing branches at 3 per cent and 6 per cent, respectively. This is well above Big C's current performance of minus 2.5 per cent to positive growth of 3 per cent, and Makro's growth of 13 per cent.
Makro tends to receive greater benefits from such schemes than Big C as its products are more related to economic activities.
This said, SCB Securities recommends "buy" on Big C with a 12month target price of Bt55 based on the dividend discount model, and "sell" on Makro with a 12month target of Bt67.
However, as both firms will benefit from the government's economic stimulus measures, the brokerage will soon review its assumptions.
Given that the package will bolster economic activities in rural areas, the demand for pickups and tractors will increase, making Somboon Advanced Technology a winner.
The company is Thailand's largest axle-shaft manufacturer for pickups with a market share of 80 per cent. Moreover, it supplies shafts to Siam Kubota, the country's largest tractor producer.
The brokerage recommends "buy" for the stock, with a 12month target price of Bt13.
The government's plan to lower the ratio of students to computers from 38:1 to 20:1 will create demand for 200,000 PCs. IT City, the computer peripherals and equipment distributor, will therefore stand to gain.
For the consumption sector, Big C Supercentre and Siam Makro will be winners from the Thai Khemkhaeng programme, as about Bt20 billion will be allocated to village funds.
Firms making building materials are expected to reap the biggest gains from the Thai Khemkhaeng (Invest for Strength) scheme phase I, worth Bt200 billion.
About Bt59 billion of the Bt200billion package will be used to develop small reservoirs and repair irrigation systems, and PVC manufacturers such as Thai Plastic and Chemicals and Vinythai will enjoy the benefits.
The brokerage said another Bt35 billion would be allocated for building and repairing roads, boosting asphalt demand and benefiting Tipco Asphalt.
Tata Steel (Thailand) and G Steel will also be beneficiaries from the stimulus package, as steel bar and wire will be major raw materials in construction works related to irrigation systems, hospitals and electric trains, SCB Securities said.
However, the brokerage is nor sure whether Sahaviriya Steel will also gain, as PVCpipe prices and maintenance costs are lower than those for steel pipelines.
Cement-makers Siam Cement, Siam City Cement and TPI Polene are other expected gainers in the buildingmaterials sector.
The brokerage estimates that the 10-12 electricrail routes will need 9 million10 million tonnes of cement.
"It is too early to calculate cement demand for all the routes, but the Purple, Red and Blue lines alone will create 2.53 million tonnes of cement consumption over their fouryear construction periods," the paper said.
For the consumption sector, Big C Supercentre and Siam Makro will be winners from the Thai Khemkhaeng programme, as about Bt20 billion will be allocated to village funds.
From the previous village funds' budget in fiscal years 20042005, Big C and Makro reported sales growth in existing branches at 3 per cent and 6 per cent, respectively. This is well above Big C's current performance of minus 2.5 per cent to positive growth of 3 per cent, and Makro's growth of 13 per cent.
Makro tends to receive greater benefits from such schemes than Big C as its products are more related to economic activities.
This said, SCB Securities recommends "buy" on Big C with a 12month target price of Bt55 based on the dividend discount model, and "sell" on Makro with a 12month target of Bt67.
However, as both firms will benefit from the government's economic stimulus measures, the brokerage will soon review its assumptions.
Given that the package will bolster economic activities in rural areas, the demand for pickups and tractors will increase, making Somboon Advanced Technology a winner.
The company is Thailand's largest axle-shaft manufacturer for pickups with a market share of 80 per cent. Moreover, it supplies shafts to Siam Kubota, the country's largest tractor producer.
The brokerage recommends "buy" for the stock, with a 12month target price of Bt13.
The government's plan to lower the ratio of students to computers from 38:1 to 20:1 will create demand for 200,000 PCs. IT City, the computer peripherals and equipment distributor, will therefore stand to gain.
For the consumption sector, Big C Supercentre and Siam Makro will be winners from the Thai Khemkhaeng programme, as about Bt20 billion will be allocated to village funds.
Thainox share sale rumoured to Posco
Thainox Stainless Plc, Southeast Asia's largest stainless steel producer, said yesterday that its top shareholder was in sale talks, stoking speculation of a possible $370-million sale to the world's sixth-largest steelmaker.
Thainox did not identify a possible buyer, but a source at the South Korean steelmaker Posco told Reuters on Wednesday that talks to buy a further stake in Thainox were in the final stages.
The Mahagitsiri Group, which owns 51.7% of Thainox and represents one of Thailand's richest families, was in talks for a possible sale of shares to an undisclosed party but was undecided, a stock exchange statement said.
Prayudh Mahagitsiri, the company's chairman and chief executive, and a key power-broker in the government led by deposed former prime minister Thaksin Shinawatra, declined to comment on the reports.
The news sent Thainox shares (INOX)up 11.5% to a four-year high of 1.65 baht in the morning session on the Stock Exchange of Thailand. The shares closed yesterday at 1.50 baht, up two satang, in trade worth 86.4 million baht. The stock has risen nearly 69% this year on speculation about a possible sale.
"We were informed that they are in the process of negotiation on the terms and conditions of the share sale transaction, and until now they have reached no conclusion," it said in the statement to the SET.
Posco had no official comment yesterday regarding the possible acquisition of Thainox Stainless Plc.
But an industry source close to the matter said:"If share prices are rising [as in the current situation], it will be hard for Posco to acquire Thainox."
Posco currently owns 15% of Thainox.Analysts say the South Korean steelmaker is seeking to acquire the Thai company to expand its cold-rolled coil capacity and overseas presence.
But any acquisition that raises Posco's stake to 25% or more would require it to offer to buy the remaining shares, according to Thai market regulations.
Earlier this week, Korean media quoted unidentified industry sources as saying Posco would buy 85% of Thainox for between 400-500 billion won ($342 million to $427.5 million). But the company source said that the rumoured acquisition prices were not correct.
Thainox did not identify a possible buyer, but a source at the South Korean steelmaker Posco told Reuters on Wednesday that talks to buy a further stake in Thainox were in the final stages.
The Mahagitsiri Group, which owns 51.7% of Thainox and represents one of Thailand's richest families, was in talks for a possible sale of shares to an undisclosed party but was undecided, a stock exchange statement said.
Prayudh Mahagitsiri, the company's chairman and chief executive, and a key power-broker in the government led by deposed former prime minister Thaksin Shinawatra, declined to comment on the reports.
The news sent Thainox shares (INOX)up 11.5% to a four-year high of 1.65 baht in the morning session on the Stock Exchange of Thailand. The shares closed yesterday at 1.50 baht, up two satang, in trade worth 86.4 million baht. The stock has risen nearly 69% this year on speculation about a possible sale.
"We were informed that they are in the process of negotiation on the terms and conditions of the share sale transaction, and until now they have reached no conclusion," it said in the statement to the SET.
Posco had no official comment yesterday regarding the possible acquisition of Thainox Stainless Plc.
But an industry source close to the matter said:"If share prices are rising [as in the current situation], it will be hard for Posco to acquire Thainox."
Posco currently owns 15% of Thainox.Analysts say the South Korean steelmaker is seeking to acquire the Thai company to expand its cold-rolled coil capacity and overseas presence.
But any acquisition that raises Posco's stake to 25% or more would require it to offer to buy the remaining shares, according to Thai market regulations.
Earlier this week, Korean media quoted unidentified industry sources as saying Posco would buy 85% of Thainox for between 400-500 billion won ($342 million to $427.5 million). But the company source said that the rumoured acquisition prices were not correct.
SIAM MORTAR TO SPEND UP TO BT700M ON CAPACITY BOOST
Siam Mortar, a construction-materials unit of Siam Cement Group, is planning to invest Bt600 million to Bt700 million to boost its annual production capacity of ready-to-use mortar by 500,000 tonnes by 2011.
The expansion is expected to serve its future growth of 20-25 per cent per year, despite shrinking demand in the overall cement market.
Managing director Rewat Suriyapananont said Siam Mortar currently operated at 80 per cent of production capacity of 1.3 million tonnes per year. It has three production plants, of which two are
located in Saraburi and the other in Nakhon Si Thammarat.
"We need to expand our production capacity and conduct aggressive marketing strategies if we plan to double our sales in five years," he said.
The new plant could be located in the central region, where demand is high, he added.
Although overall cement consumption is expected to fall by 5 per cent this year, Rewat is confident his firm's mortar sales will maintain growth of 10-15 per cent to 1 million tonnes thanks to high-quality products and innovative solutions for customers.
"Even though our sales growth is increasing, the growth in 2009 will still be lower than the [average] 20-25 per cent over the past five to six years, as a result of the economic slowdown. However, we believe that our sales growth will rise to 20 per cent next year, since property developers have returned to proceeding with their incomplete projects in big cities like Phuket," he said.
About 80 per cent of Siam Mortar's sales are from big property projects, with the remainder generated by private houses and the house-renovation market.
"Since the economic crisis erupted, we realised we should focus more on the private housing market. Despite a small volume of cement demand, it has more sustainable growth than large property projects," he said.
Hence, the company plans to change the sales proportion to generate 40 per cent of sales from property projects and 60 per cent from private housing and the renovation market.
He said the future trend of the cement market would be to develop eco-friendly products that would be good for both the environment and inhabitants' health.
"SCG Cement has allocated a budget of Bt200 million for research and development each year, because we will change ourselves from a cement-maker to a solution provider. For example, we will not only sell cement but also wall and floor systems in the future, in order to better utilise customers' budget and time," he added.
Presently, the total market for mortar cement is worth about Bt2 billion, with a volume of 2 million tonnes per year. It is predicted to expand by 10 per cent this year.
Siam Mortar has a 50-per-cent share of the market, followed by TPI Polene with 40 per cent and Siam City Cement with 10 per cent.
The expansion is expected to serve its future growth of 20-25 per cent per year, despite shrinking demand in the overall cement market.
Managing director Rewat Suriyapananont said Siam Mortar currently operated at 80 per cent of production capacity of 1.3 million tonnes per year. It has three production plants, of which two are
located in Saraburi and the other in Nakhon Si Thammarat.
"We need to expand our production capacity and conduct aggressive marketing strategies if we plan to double our sales in five years," he said.
The new plant could be located in the central region, where demand is high, he added.
Although overall cement consumption is expected to fall by 5 per cent this year, Rewat is confident his firm's mortar sales will maintain growth of 10-15 per cent to 1 million tonnes thanks to high-quality products and innovative solutions for customers.
"Even though our sales growth is increasing, the growth in 2009 will still be lower than the [average] 20-25 per cent over the past five to six years, as a result of the economic slowdown. However, we believe that our sales growth will rise to 20 per cent next year, since property developers have returned to proceeding with their incomplete projects in big cities like Phuket," he said.
About 80 per cent of Siam Mortar's sales are from big property projects, with the remainder generated by private houses and the house-renovation market.
"Since the economic crisis erupted, we realised we should focus more on the private housing market. Despite a small volume of cement demand, it has more sustainable growth than large property projects," he said.
Hence, the company plans to change the sales proportion to generate 40 per cent of sales from property projects and 60 per cent from private housing and the renovation market.
He said the future trend of the cement market would be to develop eco-friendly products that would be good for both the environment and inhabitants' health.
"SCG Cement has allocated a budget of Bt200 million for research and development each year, because we will change ourselves from a cement-maker to a solution provider. For example, we will not only sell cement but also wall and floor systems in the future, in order to better utilise customers' budget and time," he added.
Presently, the total market for mortar cement is worth about Bt2 billion, with a volume of 2 million tonnes per year. It is predicted to expand by 10 per cent this year.
Siam Mortar has a 50-per-cent share of the market, followed by TPI Polene with 40 per cent and Siam City Cement with 10 per cent.
Tuesday, October 20, 2009
Aussie firm shifts to Phuket
Australia-based swimming pool producer Autumn Solar Pty Ltd will shift its manufacturing base to Phuket to benefit from the Asean Free Trade Area.
The relocation involves a joint-venture with a local pool producer and investment of 50 million baht.
Managing director Steve Merrett said the move from Ulladulla, a coastal town in New South Wales, Australia, to Phuket would help reduce manufacturing costs by 15% to 20% due to lower wages,cheaper raw materials and savings in transportation costs.
The relocation would start this month by moving salt chlorination system production. Full production would be completed within two years when it will close its factory in Australia, he said.
The firm also plans to close a plastics factory in China which will shift to the new centre in Phuket, he said.
"It's an opportunity to have Thailand as our manufacturing base," he said."We can import materials from Australia with zero tax and export the products to China, our main market, and the rest of the world without tax as well."
The firm currently exports 90% of the equipment made at the Ulladulla plant to China, Thailand, Vietnam, Europe and the US. Autumn Solar had a turnover of US$55 million last year, he said.
The company yesterday announced a joint venture with JD Pools 2004(Thailand) which will establish a firm with registered capital of 50 million baht.
Thanusak Phungdet, chief executive of JD Pools, said the firm's factory in Phuket would double to 10,000 square metres with Autumn Solar's relocation.
The company plans to increase its exports from 20% of production to 50%in three years. It targets annual sales of 1 billion baht with the joint venture.
The Thai pool market this year is estimated at about 2 billion baht, up 10%to 15% on last year. JD Pools expects sales of 600 million baht this year, up 12% on 2008 but below its 15% target.
The relocation involves a joint-venture with a local pool producer and investment of 50 million baht.
Managing director Steve Merrett said the move from Ulladulla, a coastal town in New South Wales, Australia, to Phuket would help reduce manufacturing costs by 15% to 20% due to lower wages,cheaper raw materials and savings in transportation costs.
The relocation would start this month by moving salt chlorination system production. Full production would be completed within two years when it will close its factory in Australia, he said.
The firm also plans to close a plastics factory in China which will shift to the new centre in Phuket, he said.
"It's an opportunity to have Thailand as our manufacturing base," he said."We can import materials from Australia with zero tax and export the products to China, our main market, and the rest of the world without tax as well."
The firm currently exports 90% of the equipment made at the Ulladulla plant to China, Thailand, Vietnam, Europe and the US. Autumn Solar had a turnover of US$55 million last year, he said.
The company yesterday announced a joint venture with JD Pools 2004(Thailand) which will establish a firm with registered capital of 50 million baht.
Thanusak Phungdet, chief executive of JD Pools, said the firm's factory in Phuket would double to 10,000 square metres with Autumn Solar's relocation.
The company plans to increase its exports from 20% of production to 50%in three years. It targets annual sales of 1 billion baht with the joint venture.
The Thai pool market this year is estimated at about 2 billion baht, up 10%to 15% on last year. JD Pools expects sales of 600 million baht this year, up 12% on 2008 but below its 15% target.
Wednesday, October 14, 2009
Starmark eyes 10% growth
Starmark Co, a manufacturer of kitchen fittings, is maintaining its 10% sales growth target this year on the back of improving sentiment among both project developers and retail clients, said managing director Nantana Srisakulpinyo.
Fourth-quarter sales in the local furniture market are set to improve with a better economic outlook coupled with the approaching high season for furniture purchases, said Ms Nantana.
"Project clients have regained their confidence in investment and next year we expect the number of residential projects we're going to deal with will increase by 15% from this year," she said.
Project clients account for about 60%of sales and retail buyers 40%. But Starmark plans to boost the contribution of retail clients to 45% of sales next year as the segment has ample room to grow and also provides a better sales margin.
Spending per individual on Starmark kitchen fittings is estimated at about 150,000 to 200,000 baht.
Currently, Starmark has 45 retail outlets nationwide. It plans to add three next year, including one at Crystal Design Center.
The kitchen furniture market in Thailand has been growing at about 10% to 15% each year for the past three to five years as many international brands have continued to enter the market, said Ms Nantana.
Local furniture manufacturers are also investing more in the kitchen furniture segment as consumers are paying increasing attention to kitchen design and decoration, she added.
The company yesterday launched the "New Hygienic Thai Kitchen 2010" kitchen fittings series to tap demand for Thai-style cooking.
Fourth-quarter sales in the local furniture market are set to improve with a better economic outlook coupled with the approaching high season for furniture purchases, said Ms Nantana.
"Project clients have regained their confidence in investment and next year we expect the number of residential projects we're going to deal with will increase by 15% from this year," she said.
Project clients account for about 60%of sales and retail buyers 40%. But Starmark plans to boost the contribution of retail clients to 45% of sales next year as the segment has ample room to grow and also provides a better sales margin.
Spending per individual on Starmark kitchen fittings is estimated at about 150,000 to 200,000 baht.
Currently, Starmark has 45 retail outlets nationwide. It plans to add three next year, including one at Crystal Design Center.
The kitchen furniture market in Thailand has been growing at about 10% to 15% each year for the past three to five years as many international brands have continued to enter the market, said Ms Nantana.
Local furniture manufacturers are also investing more in the kitchen furniture segment as consumers are paying increasing attention to kitchen design and decoration, she added.
The company yesterday launched the "New Hygienic Thai Kitchen 2010" kitchen fittings series to tap demand for Thai-style cooking.
Sunday, October 11, 2009
China opposes US anti-dumping probe of steel pipes
Beijing is rejecting a move by Washington to launch an investigation into whether Chinese mills are dumping steel pipes on the US market or benefiting unfairly from government subsidies.
The probe comes as the United States and China accuse each other of protectionism, which both say will hurt efforts to end the global economic crisis.
"Blind accusations of dumping or sub-sidies in Chinese imports is lacking in factual basis, which China strongly opposes," China's Commerce Ministry said in a statement on its website on Saturday.
The statement said the problems in the American steel industry were brought on by weakened demand and should not be blamed on Chinese imports.
The US Department of Commerce last week started investigating at the request of US steel manufacturers, who say Chinese manufacturers have sold steel pipe at prices below the cost of production - a practice known as dumping - and have benefited from massive government subsidies.
US manufacturers want tariffs placed on the Chinese imports to offset the alleged subsidies.
President Barack Obama recently ap-proved higher tariffs on US imports of Chinese-made tires to slow the rapid growth of imports that a labour union has blamed for the loss of thousands of American jobs. Beijing filed a World Trade Organisation challenge to Washington's decision. The two also are involved in disputes over access to each other's markets for poultry, paper, music and movies.
The probe comes as the United States and China accuse each other of protectionism, which both say will hurt efforts to end the global economic crisis.
"Blind accusations of dumping or sub-sidies in Chinese imports is lacking in factual basis, which China strongly opposes," China's Commerce Ministry said in a statement on its website on Saturday.
The statement said the problems in the American steel industry were brought on by weakened demand and should not be blamed on Chinese imports.
The US Department of Commerce last week started investigating at the request of US steel manufacturers, who say Chinese manufacturers have sold steel pipe at prices below the cost of production - a practice known as dumping - and have benefited from massive government subsidies.
US manufacturers want tariffs placed on the Chinese imports to offset the alleged subsidies.
President Barack Obama recently ap-proved higher tariffs on US imports of Chinese-made tires to slow the rapid growth of imports that a labour union has blamed for the loss of thousands of American jobs. Beijing filed a World Trade Organisation challenge to Washington's decision. The two also are involved in disputes over access to each other's markets for poultry, paper, music and movies.
Friday, October 9, 2009
Thainox share sale rumoured to Posco
Thainox Stainless Plc, Southeast Asia's largest stainless steel producer, said yesterday that its top shareholder was in sale talks, stoking speculation of a possible $370-million sale to the world's sixth-largest steelmaker.
Thainox did not identify a possible buyer, but a source at the South Korean steelmaker Posco told Reuters on Wednesday that talks to buy a further stake in Thainox were in the final stages.
The Mahagitsiri Group, which owns 51.7% of Thainox and represents one of Thailand's richest families, was in talks for a possible sale of shares to an undisclosed party but was undecided, a stock exchange statement said.
Prayudh Mahagitsiri, the company's chairman and chief executive, and a key power-broker in the government led by deposed former prime minister Thaksin Shinawatra, declined to comment on the reports.
The news sent Thainox shares (INOX)up 11.5% to a four-year high of 1.65 baht in the morning session on the Stock Exchange of Thailand. The shares closed yesterday at 1.50 baht, up two satang, in trade worth 86.4 million baht. The stock has risen nearly 69% this year on speculation about a possible sale.
"We were informed that they are in the process of negotiation on the terms and conditions of the share sale transaction, and until now they have reached no conclusion," it said in the statement to the SET.
Posco had no official comment yesterday regarding the possible acquisition of Thainox Stainless Plc.
But an industry source close to the matter said:"If share prices are rising [as in the current situation], it will be hard for Posco to acquire Thainox."
Posco currently owns 15% of Thainox.Analysts say the South Korean steelmaker is seeking to acquire the Thai company to expand its cold-rolled coil capacity and overseas presence.
But any acquisition that raises Posco's stake to 25% or more would require it to offer to buy the remaining shares, according to Thai market regulations.
Earlier this week, Korean media quoted unidentified industry sources as saying Posco would buy 85% of Thainox for between 400-500 billion won ($342 million to $427.5 million). But the company source said that the rumoured acquisition prices were not correct.
Based on a market price of 1.57 baht,the value of Thainox's remaining 85%stake is about 12.24 billion baht.
Thainox has 300,000 tonnes of capacity and exports 40% of its output to Europe and other overseas markets.
Thainox did not identify a possible buyer, but a source at the South Korean steelmaker Posco told Reuters on Wednesday that talks to buy a further stake in Thainox were in the final stages.
The Mahagitsiri Group, which owns 51.7% of Thainox and represents one of Thailand's richest families, was in talks for a possible sale of shares to an undisclosed party but was undecided, a stock exchange statement said.
Prayudh Mahagitsiri, the company's chairman and chief executive, and a key power-broker in the government led by deposed former prime minister Thaksin Shinawatra, declined to comment on the reports.
The news sent Thainox shares (INOX)up 11.5% to a four-year high of 1.65 baht in the morning session on the Stock Exchange of Thailand. The shares closed yesterday at 1.50 baht, up two satang, in trade worth 86.4 million baht. The stock has risen nearly 69% this year on speculation about a possible sale.
"We were informed that they are in the process of negotiation on the terms and conditions of the share sale transaction, and until now they have reached no conclusion," it said in the statement to the SET.
Posco had no official comment yesterday regarding the possible acquisition of Thainox Stainless Plc.
But an industry source close to the matter said:"If share prices are rising [as in the current situation], it will be hard for Posco to acquire Thainox."
Posco currently owns 15% of Thainox.Analysts say the South Korean steelmaker is seeking to acquire the Thai company to expand its cold-rolled coil capacity and overseas presence.
But any acquisition that raises Posco's stake to 25% or more would require it to offer to buy the remaining shares, according to Thai market regulations.
Earlier this week, Korean media quoted unidentified industry sources as saying Posco would buy 85% of Thainox for between 400-500 billion won ($342 million to $427.5 million). But the company source said that the rumoured acquisition prices were not correct.
Based on a market price of 1.57 baht,the value of Thainox's remaining 85%stake is about 12.24 billion baht.
Thainox has 300,000 tonnes of capacity and exports 40% of its output to Europe and other overseas markets.
Wednesday, October 7, 2009
POSCO "MULLS SNAPPING UP REMAINDER OF THAINOX"
Pasco, Soth Korea's biggest steelmaker, is considering buying up to 85 per cent of Thailand's Thainox Stainless in a deal that could be worth as much as US$428 million (Bt14.3 billion), according to a Bloomberg report.
prayuth Mahakijsiri, a major shreholder of Thainox, declined to comment when contacted by The Nation yesterday.
However, Choi Doo Jin, a Posco spokesman, said details such as price and the size of the stake in the Thai company had not yet been decided.
Posco, which already owns 15 per cent of Thainox, may invest up to as much as 500 billion won in the firm for the remainder of the shares, the Korea Economic Daily reported on its website.
The South Korean company is expected to sign a preliminary agreement this month as it is negotiating the price with thai shareholders, the report said.
Prayuth, who also has sizeable interests in the coffee industry and other businesses, branched into the stainless-steel industry more than a decade ago.
In the second quarter, Thainox posted a consolidated net profit of Bt221.03 million, down from Bt311.75 million in the same period last year.
It posted a net loss of Bt240.06 million for the first six months of the year against a net profit of Bt682.94 million for the same period last year.
As of last April, Prayuth and his family controlled more than 54 per cent of Thainox, which booked a consolidated net loss of Bt1.16 billion in 2008, against a consolidated net profit of Bt134.08 million in 2007.
Late last year, employees of Thainox staged a protest over changes to their pay and welfare as they were asked to sign new contracts which substantially cut welfare and bonus payments.
Steel companies have been hit by a sharp decline in prices, along with those of other metals.
prayuth Mahakijsiri, a major shreholder of Thainox, declined to comment when contacted by The Nation yesterday.
However, Choi Doo Jin, a Posco spokesman, said details such as price and the size of the stake in the Thai company had not yet been decided.
Posco, which already owns 15 per cent of Thainox, may invest up to as much as 500 billion won in the firm for the remainder of the shares, the Korea Economic Daily reported on its website.
The South Korean company is expected to sign a preliminary agreement this month as it is negotiating the price with thai shareholders, the report said.
Prayuth, who also has sizeable interests in the coffee industry and other businesses, branched into the stainless-steel industry more than a decade ago.
In the second quarter, Thainox posted a consolidated net profit of Bt221.03 million, down from Bt311.75 million in the same period last year.
It posted a net loss of Bt240.06 million for the first six months of the year against a net profit of Bt682.94 million for the same period last year.
As of last April, Prayuth and his family controlled more than 54 per cent of Thainox, which booked a consolidated net loss of Bt1.16 billion in 2008, against a consolidated net profit of Bt134.08 million in 2007.
Late last year, employees of Thainox staged a protest over changes to their pay and welfare as they were asked to sign new contracts which substantially cut welfare and bonus payments.
Steel companies have been hit by a sharp decline in prices, along with those of other metals.
Tuesday, October 6, 2009
SCG mortar unit commits B700m to expansion
Siam Cement Group (SCG), the country's biggest industrial conglomerate, expects to invest about 700 million baht to lift its production capacity of ready-to-use cement to 2 million tonnes within two years.
The plan is being considered after Siam Mortar Co, a building materials unit of SCG, has increased its market share in ready-to-use mortar to 50%through sales of 500,000 tonnes in the first six months.
The company targets sales of one billion baht in 2009 and aims to double the figure within five years, said managing director Rewat Suriyapananont.
"We are currently utilising 80% of the plant's capacity which totals 1.3 million tonnes per year," he said, adding that it had three manufacturing plants, two in Saraburi and another in Nakhon Sri Thammarat.
"We aim to increase yearly capacity to between 1.8 million and 2 million tonnes within two years. The construction is likely to start early next year."
Mr Rewat said Siam Mortar would likely to expand the capacity at the Saraburi site. The company is also considering other locations to build a new plant somewhere near Bangkok, where mortar demand is substantial, or in the eastern and southern regions, he said.
"We have seen demand picking up substantially. Several hotel, resort and condominium projects in Phuket, for example, have resumed construction in the current quarter after they were suspended in the first half," said Mr Rewat.
"The current market rebound prompts us to believe that the market will come back quickly next year with expected growth of 20% over this year."
The overall ready-to-use mortar market is projected at 2 billion baht this year with sales volume of 2 million tonnes,an increase of 10% from 2008.
Sales of Siam Mortar rose 15% over the first half and its share rose to 50%from 40% in the same period last year.
TPI Polene is second in the segment with a 30% share and and Siam City Cement's Insee brand third with 10%.
To maintain its leading position, Mr Rewat said Siam Mortar would step up the launches of innovative products and services such as hygienic mortar. Also,the company aims to transform itself from a manufacturer of mortar to a full solution provider, he said.
Environmentally friendly products developed in line with SCG's Eco Value principle will also be in focus, he said.
"Green products are currently in high demand and we expect also in the year to come because of concerns over global warming," Mr Rewat said.
Shares of Siam Cement (SCC) closed on Friday on the Stock Exchange of Thailand at 220 baht, down three baht, in trade worth 586 million baht.
The plan is being considered after Siam Mortar Co, a building materials unit of SCG, has increased its market share in ready-to-use mortar to 50%through sales of 500,000 tonnes in the first six months.
The company targets sales of one billion baht in 2009 and aims to double the figure within five years, said managing director Rewat Suriyapananont.
"We are currently utilising 80% of the plant's capacity which totals 1.3 million tonnes per year," he said, adding that it had three manufacturing plants, two in Saraburi and another in Nakhon Sri Thammarat.
"We aim to increase yearly capacity to between 1.8 million and 2 million tonnes within two years. The construction is likely to start early next year."
Mr Rewat said Siam Mortar would likely to expand the capacity at the Saraburi site. The company is also considering other locations to build a new plant somewhere near Bangkok, where mortar demand is substantial, or in the eastern and southern regions, he said.
"We have seen demand picking up substantially. Several hotel, resort and condominium projects in Phuket, for example, have resumed construction in the current quarter after they were suspended in the first half," said Mr Rewat.
"The current market rebound prompts us to believe that the market will come back quickly next year with expected growth of 20% over this year."
The overall ready-to-use mortar market is projected at 2 billion baht this year with sales volume of 2 million tonnes,an increase of 10% from 2008.
Sales of Siam Mortar rose 15% over the first half and its share rose to 50%from 40% in the same period last year.
TPI Polene is second in the segment with a 30% share and and Siam City Cement's Insee brand third with 10%.
To maintain its leading position, Mr Rewat said Siam Mortar would step up the launches of innovative products and services such as hygienic mortar. Also,the company aims to transform itself from a manufacturer of mortar to a full solution provider, he said.
Environmentally friendly products developed in line with SCG's Eco Value principle will also be in focus, he said.
"Green products are currently in high demand and we expect also in the year to come because of concerns over global warming," Mr Rewat said.
Shares of Siam Cement (SCC) closed on Friday on the Stock Exchange of Thailand at 220 baht, down three baht, in trade worth 586 million baht.
GOING GREEN IS THE NEW MANTRA FOR DESIGNERS
In a bid to curb global warming, design trends in residnetial and office buildings are in creasingly espousing the green concept.
Property developers as well as construction materials manufacturers are laying greater emphasis on green enviroment.
A survey by The Nation on design trends showed that residential and commercial building owners are most concerned about environmental safety. As a result, architects and interior designers are creating buildings that ensure energy savings, wiht the construction desigh matching interior design to reduce energy consumption.
Supalai's palai's president, Prateep Tangmatitham, said the company takes concerns about the environment into account when designing both low-rise and high-rise residences. While designing, the direction of the building is given special emphasis,taking into account wind a d light.
The company also selects the consturction raw materials that help to reduce energy consumption such as green glass, double wall and roftile syste,.
LPN Development managing director Opas Sripayak said that most of the company's residential projects are now designed environ mentally friendly and int eh process it helps its customers save money on electricity.
"Our buildings will cut the electirc bills of our customers on an average by 10 to 20 per cent when compared with the residents tha use the normal system"he said
SCG Building Materials, a subsidiary of SCG Group, teamed up with Japanese company Sekisui Chemical to launch an innovative Modular home Technology.
SCG Building Materials president Pichit Maipoom said the company's continuous study of cliential projects are now designed environmentally friendly and int eh process it helps its customers save money on electricity.
"Our buildings will cut the electirc bills of our customers on an average by 10 to 20 per cent when compared with the residents that use the normal system," he said.
SCG Building Materials, a subsidiary of SCG Grooup, teamed up with Japanese company Sekisui chemical to launch an innovative Modular Home Technology.
SCG Building Materials president Pichit Maipoom said the company's continuous study of cliental behaviour and house-related needs found that customers wanted quality both in construction materials and construction as well as good quality of life. "A good house should be convenient, clean, safe, and worthy of the life cycle cost."
In responding to these needs,pichit said the company would provide a comprehensive house service system through its collaboration with Sekisui Chemical, the leading Japanese company specialising in the housing business for more than 30 years and the laargest manufecturer of modular Home.
Sekisui will introduce a distinctive and advanced Modular Home
technology for the first time in Thailand.
"Combined with SCG's good qualtity building materials, it will produce a good quality house that genuiely meets and understands cistp,ers
de,amds" he said.
The innovative Modular Home Technology will be called "SCGHEIM".
Unlike other house-building technologies, the Modular Home offers an innovative creation in which more than 80 per cent of house components are produced in the factory and assembled into modules ready to be installed on site in a couple of days.
Besides, the house is designed for energy-efficiency with life cycle cost for a period of 30 years.
Following the energy-saving concept, SCG-HEIM houses install insulation around the house and air tightness to fill in spaces between joints of the house to keep the room temperature between 25 and 29 degrees Celsius. Air Factory is installed to ensure indoor air purification and consistent flow of air,which in turn will help save power from the use of air-conditioners.
Most home-owners these days have the energy-saving concept in mind when spending on renovation.
Home-owner Wichart, 40, has saved 10.38 per cent on energy consumption, or 863 units of electricity per year, after the building was renovated for energy efficiency.
The refurbishment not only saves money (about Bt3,020 per year based on a cost of Bt3.50 per unit), nut also creates better living conditions and a healthier environment by reducing greenhouse-gas emissions.
One principle that must be accepted in such conversions, how wever, is that upfront investm4nt is often steep but offers generous returns over time. The core ideas are stopping the incursion of hot air into living spaces, changing habits and using energy-saving electrical appliances.
Installing aluminium foil and fibreglass insulatijon is the most efficient way to cut electricity bills,because this can prevent a build-up of heat. Where the insulation should be installed depends on the home owner's budget.
Those on a very tight budget should perhaps limit the installation of fibreglass insulation to the attic,because that is directly heated by the sun. Those who can afford it, should install insulation not only in the attic,nut also in ceilings and walls, particularly in rooms with air-conditioning, because it can prevent heat flow and reduce cooling costs.
Importantly,insulation at least3 inches thick is recommended for hot countries like Thailand. Layers of lesser thickness are ot as energy efficient.
The latest innovation in construction raw materials helps home owners to save costs although they have to pay a higher price for energy-saving raw materials. But in the long term, they can cut their cost of living than by using normal products. As a result, companies have to develop innovative products to sefrve the change in customer demand, Pichit said.
Property developers as well as construction materials manufacturers are laying greater emphasis on green enviroment.
A survey by The Nation on design trends showed that residential and commercial building owners are most concerned about environmental safety. As a result, architects and interior designers are creating buildings that ensure energy savings, wiht the construction desigh matching interior design to reduce energy consumption.
Supalai's palai's president, Prateep Tangmatitham, said the company takes concerns about the environment into account when designing both low-rise and high-rise residences. While designing, the direction of the building is given special emphasis,taking into account wind a d light.
The company also selects the consturction raw materials that help to reduce energy consumption such as green glass, double wall and roftile syste,.
LPN Development managing director Opas Sripayak said that most of the company's residential projects are now designed environ mentally friendly and int eh process it helps its customers save money on electricity.
"Our buildings will cut the electirc bills of our customers on an average by 10 to 20 per cent when compared with the residents tha use the normal system"he said
SCG Building Materials, a subsidiary of SCG Group, teamed up with Japanese company Sekisui Chemical to launch an innovative Modular home Technology.
SCG Building Materials president Pichit Maipoom said the company's continuous study of cliential projects are now designed environmentally friendly and int eh process it helps its customers save money on electricity.
"Our buildings will cut the electirc bills of our customers on an average by 10 to 20 per cent when compared with the residents that use the normal system," he said.
SCG Building Materials, a subsidiary of SCG Grooup, teamed up with Japanese company Sekisui chemical to launch an innovative Modular Home Technology.
SCG Building Materials president Pichit Maipoom said the company's continuous study of cliental behaviour and house-related needs found that customers wanted quality both in construction materials and construction as well as good quality of life. "A good house should be convenient, clean, safe, and worthy of the life cycle cost."
In responding to these needs,pichit said the company would provide a comprehensive house service system through its collaboration with Sekisui Chemical, the leading Japanese company specialising in the housing business for more than 30 years and the laargest manufecturer of modular Home.
Sekisui will introduce a distinctive and advanced Modular Home
technology for the first time in Thailand.
"Combined with SCG's good qualtity building materials, it will produce a good quality house that genuiely meets and understands cistp,ers
de,amds" he said.
The innovative Modular Home Technology will be called "SCGHEIM".
Unlike other house-building technologies, the Modular Home offers an innovative creation in which more than 80 per cent of house components are produced in the factory and assembled into modules ready to be installed on site in a couple of days.
Besides, the house is designed for energy-efficiency with life cycle cost for a period of 30 years.
Following the energy-saving concept, SCG-HEIM houses install insulation around the house and air tightness to fill in spaces between joints of the house to keep the room temperature between 25 and 29 degrees Celsius. Air Factory is installed to ensure indoor air purification and consistent flow of air,which in turn will help save power from the use of air-conditioners.
Most home-owners these days have the energy-saving concept in mind when spending on renovation.
Home-owner Wichart, 40, has saved 10.38 per cent on energy consumption, or 863 units of electricity per year, after the building was renovated for energy efficiency.
The refurbishment not only saves money (about Bt3,020 per year based on a cost of Bt3.50 per unit), nut also creates better living conditions and a healthier environment by reducing greenhouse-gas emissions.
One principle that must be accepted in such conversions, how wever, is that upfront investm4nt is often steep but offers generous returns over time. The core ideas are stopping the incursion of hot air into living spaces, changing habits and using energy-saving electrical appliances.
Installing aluminium foil and fibreglass insulatijon is the most efficient way to cut electricity bills,because this can prevent a build-up of heat. Where the insulation should be installed depends on the home owner's budget.
Those on a very tight budget should perhaps limit the installation of fibreglass insulation to the attic,because that is directly heated by the sun. Those who can afford it, should install insulation not only in the attic,nut also in ceilings and walls, particularly in rooms with air-conditioning, because it can prevent heat flow and reduce cooling costs.
Importantly,insulation at least3 inches thick is recommended for hot countries like Thailand. Layers of lesser thickness are ot as energy efficient.
The latest innovation in construction raw materials helps home owners to save costs although they have to pay a higher price for energy-saving raw materials. But in the long term, they can cut their cost of living than by using normal products. As a result, companies have to develop innovative products to sefrve the change in customer demand, Pichit said.
SIAM MORTAR TO SPEND UP TO BT700M ON CAPACITY BOOST
Siam Mortar, a construction-materials unit of Siam Cement Group, is planning to invest Bt600 million to Bt700 million to boost its annual production capacity of ready-to-use mortar by 500,000 tonnes by 2011.
The expansion is expected to serve its future growth of 20-25 per cent per year, despite shrinking demand in the overall cement market.
Managing director Rewat Suriyapananont said Siam Mortar currently operated at 80 per cent of production capacity of 1.3 million tonnes per year. It has three production plants, of which two are
located in Saraburi and the other in Nakhon Si Thammarat.
"We need to expand our production capacity and conduct aggressive marketing strategies if we plan to double our sales in five years," he said.
The new plant could be located in the central region, where demand is high, he added.
Although overall cement consumption is expected to fall by 5 per cent this year, Rewat is confident his firm's mortar sales will maintain growth of 10-15 per cent to 1 million tonnes thanks to high-quality products and innovative solutions for customers.
"Even though our sales growth is increasing, the growth in 2009 will still be lower than the [average] 20-25 per cent over the past five to six years, as a result of the economic slowdown. However, we believe that our sales growth will rise to 20 per cent next year, since property developers have returned to proceeding with their incomplete projects in big cities like Phuket," he said.
About 80 per cent of Siam Mortar's sales are from big property projects, with the remainder generated by private houses and the house-renovation market.
"Since the economic crisis erupted, we realised we should focus more on the private housing market. Despite a small volume of cement demand, it has more sustainable growth than large property projects," he said.
Hence, the company plans to change the sales proportion to generate 40 per cent of sales from property projects and 60 per cent from private housing and the renovation market.
He said the future trend of the cement market would be to develop eco-friendly products that would be good for both the environment and inhabitants' health.
"SCG Cement has allocated a budget of Bt200 million for research and development each year, because we will change ourselves from a cement-maker to a solution provider. For example, we will not only sell cement but also wall and floor systems in the future, in order to better utilise customers' budget and time," he added.
Presently, the total market for mortar cement is worth about Bt2 billion, with a volume of 2 million tonnes per year. It is predicted to expand by 10 per cent this year.
Siam Mortar has a 50-per-cent share of the market, followed by TPI Polene with 40 per cent and Siam City Cement with 10 per cent.
The expansion is expected to serve its future growth of 20-25 per cent per year, despite shrinking demand in the overall cement market.
Managing director Rewat Suriyapananont said Siam Mortar currently operated at 80 per cent of production capacity of 1.3 million tonnes per year. It has three production plants, of which two are
located in Saraburi and the other in Nakhon Si Thammarat.
"We need to expand our production capacity and conduct aggressive marketing strategies if we plan to double our sales in five years," he said.
The new plant could be located in the central region, where demand is high, he added.
Although overall cement consumption is expected to fall by 5 per cent this year, Rewat is confident his firm's mortar sales will maintain growth of 10-15 per cent to 1 million tonnes thanks to high-quality products and innovative solutions for customers.
"Even though our sales growth is increasing, the growth in 2009 will still be lower than the [average] 20-25 per cent over the past five to six years, as a result of the economic slowdown. However, we believe that our sales growth will rise to 20 per cent next year, since property developers have returned to proceeding with their incomplete projects in big cities like Phuket," he said.
About 80 per cent of Siam Mortar's sales are from big property projects, with the remainder generated by private houses and the house-renovation market.
"Since the economic crisis erupted, we realised we should focus more on the private housing market. Despite a small volume of cement demand, it has more sustainable growth than large property projects," he said.
Hence, the company plans to change the sales proportion to generate 40 per cent of sales from property projects and 60 per cent from private housing and the renovation market.
He said the future trend of the cement market would be to develop eco-friendly products that would be good for both the environment and inhabitants' health.
"SCG Cement has allocated a budget of Bt200 million for research and development each year, because we will change ourselves from a cement-maker to a solution provider. For example, we will not only sell cement but also wall and floor systems in the future, in order to better utilise customers' budget and time," he added.
Presently, the total market for mortar cement is worth about Bt2 billion, with a volume of 2 million tonnes per year. It is predicted to expand by 10 per cent this year.
Siam Mortar has a 50-per-cent share of the market, followed by TPI Polene with 40 per cent and Siam City Cement with 10 per cent.
Friday, October 2, 2009
INNOVATION AND ADDED VALUE PAY OFF FOR SCG FIRM
SCG Building Materials, a subsidiary of the Siam Cement Group, has a simple marketing strategy: "Create better functions for all." The company's drive for innovative products and added value has won it acclaim within the giant conglomerate.
SCG Building Materials offers a range of products, including tiles, faucets, Cotto-brand sanitary-ware, CPAC Monier-brand roofing materials, CPAC Design-brand paving blocks and Siam Fiber Glass-brand insulation products.
President Pichit Maiphum said SCG Building Materials was forced to focus on innovative products and adding value to others because that generated higher returns on investment than producing and distributing cheaper products in a market with fierce competition and low profit margins.
"There is high competition for our products, so we have to have a marketing strategy of producing creative building solutions. This has more value than simply selling [conventional] products," he said.
The strategy, pursued over the past four to five years, has led to SCG Building Materials winning three out of four awards in the Siam Cement Group's first "in-house" Marketing Best Awards 2009.
The awards recognise superior marketing strategies, in which companies have built their brands and created new distribution channels, among SCG's subsidiaries. Eighteen marketing teams competed for the awards this year, the first time the competition has been held. There were only four awards: the SCG Marketing Best Award, a first runner up, a second runner up and Creative Best.
SCG Building Materials' three awards included first runner up for Cotto Speed Bathroom, second runner up for the Disney Collection by Cotto Tile, and Creative Best for Spark the Smart Installer, by CPAC Excella roof tiles.
Siam Sanitary Ware Industry marketing specialist Parapapar Atcharanukul, who led the Cotto Speed Bathroom team, said the company had succeeded in creating a marketing solution for tiles and sanitary-ware by offering a system in which it could design, renovate and build a customer's bathroom in seven to 15 days.
The company is currently developing the building concept to make it even faster in the future. This adds value to the products, rather than simply selling ceramic tiles and sanitary-ware, she said.
Cotto (Disney) Thai Ceramic marketing manager Pranee Chansuroj said the company created co-branded products in deals with globally-recognised brands such as Disney. This differentiated the products from normal ceramic tiles.
The company plans to join other global partners to produce more co-branded ceramic tiles this year, building added value for its products.
The presales manager for Excella roof tiles, Siriwan Lila, said Thai Ceramic Roof Tile had created a new distribution channel through local residents to the Thai temple market.
The company recognised a business opportunity in offering quality roof tiles for use on temples.
Previously, community funds used to renovate temple roofs were spent on locally made roof tiles of low quality.
Pichit said the three awards proved that his company's strategy was succeeding in building its brands. However, market pressures meant his company would have pursued the marketing strategy whether it received awards or not.
SCG Building Materials offers a range of products, including tiles, faucets, Cotto-brand sanitary-ware, CPAC Monier-brand roofing materials, CPAC Design-brand paving blocks and Siam Fiber Glass-brand insulation products.
President Pichit Maiphum said SCG Building Materials was forced to focus on innovative products and adding value to others because that generated higher returns on investment than producing and distributing cheaper products in a market with fierce competition and low profit margins.
"There is high competition for our products, so we have to have a marketing strategy of producing creative building solutions. This has more value than simply selling [conventional] products," he said.
The strategy, pursued over the past four to five years, has led to SCG Building Materials winning three out of four awards in the Siam Cement Group's first "in-house" Marketing Best Awards 2009.
The awards recognise superior marketing strategies, in which companies have built their brands and created new distribution channels, among SCG's subsidiaries. Eighteen marketing teams competed for the awards this year, the first time the competition has been held. There were only four awards: the SCG Marketing Best Award, a first runner up, a second runner up and Creative Best.
SCG Building Materials' three awards included first runner up for Cotto Speed Bathroom, second runner up for the Disney Collection by Cotto Tile, and Creative Best for Spark the Smart Installer, by CPAC Excella roof tiles.
Siam Sanitary Ware Industry marketing specialist Parapapar Atcharanukul, who led the Cotto Speed Bathroom team, said the company had succeeded in creating a marketing solution for tiles and sanitary-ware by offering a system in which it could design, renovate and build a customer's bathroom in seven to 15 days.
The company is currently developing the building concept to make it even faster in the future. This adds value to the products, rather than simply selling ceramic tiles and sanitary-ware, she said.
Cotto (Disney) Thai Ceramic marketing manager Pranee Chansuroj said the company created co-branded products in deals with globally-recognised brands such as Disney. This differentiated the products from normal ceramic tiles.
The company plans to join other global partners to produce more co-branded ceramic tiles this year, building added value for its products.
The presales manager for Excella roof tiles, Siriwan Lila, said Thai Ceramic Roof Tile had created a new distribution channel through local residents to the Thai temple market.
The company recognised a business opportunity in offering quality roof tiles for use on temples.
Previously, community funds used to renovate temple roofs were spent on locally made roof tiles of low quality.
Pichit said the three awards proved that his company's strategy was succeeding in building its brands. However, market pressures meant his company would have pursued the marketing strategy whether it received awards or not.
Rayong appeal discussed
The country's industrial giants gathered yesterday to discuss the court-ordered suspension of permits at Map Ta Phut and whether the private sector could petition the court to relax its orders.
Led by the two largest operators at the Rayong industrial estate - PTT group and Siam Cement Group - the companies discussed possible appeals with the Federation of Thai Industries (FTI). The government is already planning an appeal.
"The private sector, particularly big companies, have asked the government if the law will allow them to file petitions to request the court to delay its ruling's effective date," FTI chairman Santi Vilassakdanont said."In the dispute though it seems to be an argument between the government and activists - the sufferer is the business sector."
The Administrative Court on Tuesday suspended operating permits for 76 projects, based on Section 67 of the 2007 Constitution, which addresses the impact of industries on community health and the environment.
The FTI urged the government to seek a long-term solution that could allow investment and environmental conservation to coexist.
PTT, its subsidiaries and joint ventures have invested more than 120 billion baht in 25 projects, of a total 76 suspended, said Prasert Bunsumpun, president and chief executive of PTT.
The group will not be hurt as much as previously predicted if PTT's projects have to be delayed to comply with the court order, as most have yet to start construction, he said.
However, PTT's sixth gas separation plant and the olefins cracker of PTT Chemical Plc are heavily affected.
As a cracker is the upstream unit for petrochemicals, related industries would be short of domestic feedstocks and would require imported materials. SCG also has ongoing investments in a naphtha cracker and downstream plants un-der construction in the area.
"The whole country will see the impact - from the construction sector,creditors, employment, stakeholders and the stock market - not only the industrial sector will suffer," Mr Prasert said."They have abided by the law since the beginning, so I don't think they will tolerate this."
Tevin Vongvanich, chief financial officer of PTT Plc, echoed Mr Prasert.
"The damage has happened already.Some projects designed to improve the environment are also affected," he said."If it becomes clear that they don't want us to expand [in Map Ta Phut]anymore, we might have to look at other locations to place our investments in the future."
Surong Bualakula, a PTT senior executive vice-president for international business, said investor confidence had been shaken.
"The message perceived by investors abroad has made them panic. They [perhaps] don't know where Map Ta Phut is but it is actually the image of the country that has been hurt," he said.
Concerned parties should look at ways some projects can go ahead along with health impact assessments (HIA),he said."We should find the balance for environmentally responsible industries to live together with communities."
According to the ministry,11 projects out of 76 received environmental impact assessment (EIA) approvals before the 2007 Constitution took effect, so these projects worth 58 billion baht need not be suspended.
The remaining 65 projects include 47 expansions and 18 new investments,worth 229 billion baht in total.
Patareeya Benjapolchai, president of the Stock Exchange of Thailand, said the exchange hoped SET-listed PTT and SCG could resolve the matter."I believe there will be a positive answer to it as the government sector is taking interest in solving the problem," she said.
The issue is expected to have an impact on foreign direct investment rather than on the foreign investors in the Thai stock market due to their diversified investment portfolios, she said.
PTT shares closed yesterday at 263 baht, up one baht, in trade worth 1.11 billion. SCC also rose one baht to 223.
Led by the two largest operators at the Rayong industrial estate - PTT group and Siam Cement Group - the companies discussed possible appeals with the Federation of Thai Industries (FTI). The government is already planning an appeal.
"The private sector, particularly big companies, have asked the government if the law will allow them to file petitions to request the court to delay its ruling's effective date," FTI chairman Santi Vilassakdanont said."In the dispute though it seems to be an argument between the government and activists - the sufferer is the business sector."
The Administrative Court on Tuesday suspended operating permits for 76 projects, based on Section 67 of the 2007 Constitution, which addresses the impact of industries on community health and the environment.
The FTI urged the government to seek a long-term solution that could allow investment and environmental conservation to coexist.
PTT, its subsidiaries and joint ventures have invested more than 120 billion baht in 25 projects, of a total 76 suspended, said Prasert Bunsumpun, president and chief executive of PTT.
The group will not be hurt as much as previously predicted if PTT's projects have to be delayed to comply with the court order, as most have yet to start construction, he said.
However, PTT's sixth gas separation plant and the olefins cracker of PTT Chemical Plc are heavily affected.
As a cracker is the upstream unit for petrochemicals, related industries would be short of domestic feedstocks and would require imported materials. SCG also has ongoing investments in a naphtha cracker and downstream plants un-der construction in the area.
"The whole country will see the impact - from the construction sector,creditors, employment, stakeholders and the stock market - not only the industrial sector will suffer," Mr Prasert said."They have abided by the law since the beginning, so I don't think they will tolerate this."
Tevin Vongvanich, chief financial officer of PTT Plc, echoed Mr Prasert.
"The damage has happened already.Some projects designed to improve the environment are also affected," he said."If it becomes clear that they don't want us to expand [in Map Ta Phut]anymore, we might have to look at other locations to place our investments in the future."
Surong Bualakula, a PTT senior executive vice-president for international business, said investor confidence had been shaken.
"The message perceived by investors abroad has made them panic. They [perhaps] don't know where Map Ta Phut is but it is actually the image of the country that has been hurt," he said.
Concerned parties should look at ways some projects can go ahead along with health impact assessments (HIA),he said."We should find the balance for environmentally responsible industries to live together with communities."
According to the ministry,11 projects out of 76 received environmental impact assessment (EIA) approvals before the 2007 Constitution took effect, so these projects worth 58 billion baht need not be suspended.
The remaining 65 projects include 47 expansions and 18 new investments,worth 229 billion baht in total.
Patareeya Benjapolchai, president of the Stock Exchange of Thailand, said the exchange hoped SET-listed PTT and SCG could resolve the matter."I believe there will be a positive answer to it as the government sector is taking interest in solving the problem," she said.
The issue is expected to have an impact on foreign direct investment rather than on the foreign investors in the Thai stock market due to their diversified investment portfolios, she said.
PTT shares closed yesterday at 263 baht, up one baht, in trade worth 1.11 billion. SCC also rose one baht to 223.
Sunday, September 27, 2009
China's industrial profits decline 10.6%
Profits at China's oil producers, steel makers and other major industrial companies fell 10.6% in the first eight months of 2009 from the same period a year earlier, the National Bureau of Statistics said yesterday.
Total profits for the biggest Chinese industrial companies -those with annual revenues above 5 million yuan ($732,000)- were 1.67 trillion yuan ($245 billion) from January to August, data showed.
The data highlighted the impact of the global economic crisis on China's biggest companies, both private and state-owned, despite a multi-billiondollar government stimulus plan.
But it also marked an improvement from the last such survey in May, in which industrial profits fell 22.9% to 850 billion yuan ($124 billion) in the first five months of 2009 from the same period a year earlier.
Hardest hit were the iron and steel sector, where profits declined by 71.7%,and the petroleum and natural gas industries, which suffered a 68.5% drop in profits.
Total profits for the biggest Chinese industrial companies -those with annual revenues above 5 million yuan ($732,000)- were 1.67 trillion yuan ($245 billion) from January to August, data showed.
The data highlighted the impact of the global economic crisis on China's biggest companies, both private and state-owned, despite a multi-billiondollar government stimulus plan.
But it also marked an improvement from the last such survey in May, in which industrial profits fell 22.9% to 850 billion yuan ($124 billion) in the first five months of 2009 from the same period a year earlier.
Hardest hit were the iron and steel sector, where profits declined by 71.7%,and the petroleum and natural gas industries, which suffered a 68.5% drop in profits.
Two provinces singled out for steel mill
A preliminary environmental impact study has started at two sites in Chanthaburi and Songkhla that have been deemed promising for an upstream steel project.
The study is expected to take six months and if the cabinet approves the results, it would notify prospective investors and ask them to prepare investment plan and details on contributions the ventures would make to the communities.
Sources said the Strategic Environmental Assessment (SEA) studies would be conducted in Ranod district of Songkhla and Laem Sing in Chanthaburi.
The site in Chanthaburi is 70% forest area that needs rehabilitation, and the remaining land was formerly a prawn farm. The location, near industrial plants that need steel products in the Eastern Seaboard, offers the site an advantage.However, additional work needs to be done to improve ship access.
The site in Songkhla offers good seaport facilities but is distant from industrial customers. It currently houses a rice farm and an old prawn farm.
According to Vikrom Vajragupta, director of the Iron and Steel Institute of Thailand, the study would cover the establishment of community livelihood development programmes such as irrigation projects, water treatment and farm machinery centres to help local communities coexist with the industry.
The study on geographic features will identify if certain alterations will be needed to accommodate upstream steel manufacturing and would involve community participation.
Also part of the study will be the establishment of supporting industries such as shipbuilding or other steel-intensive industries to promote industrial cluster development.
The study is expected to take six months and if the cabinet approves the results, it would notify prospective investors and ask them to prepare investment plan and details on contributions the ventures would make to the communities.
Sources said the Strategic Environmental Assessment (SEA) studies would be conducted in Ranod district of Songkhla and Laem Sing in Chanthaburi.
The site in Chanthaburi is 70% forest area that needs rehabilitation, and the remaining land was formerly a prawn farm. The location, near industrial plants that need steel products in the Eastern Seaboard, offers the site an advantage.However, additional work needs to be done to improve ship access.
The site in Songkhla offers good seaport facilities but is distant from industrial customers. It currently houses a rice farm and an old prawn farm.
According to Vikrom Vajragupta, director of the Iron and Steel Institute of Thailand, the study would cover the establishment of community livelihood development programmes such as irrigation projects, water treatment and farm machinery centres to help local communities coexist with the industry.
The study on geographic features will identify if certain alterations will be needed to accommodate upstream steel manufacturing and would involve community participation.
Also part of the study will be the establishment of supporting industries such as shipbuilding or other steel-intensive industries to promote industrial cluster development.
PRODUCERS DENY HOME PRICES BEING PUSHED UP
Although prices for construction raw materials are expected to rise significantly in the fourth quarter and early next year, the increase will not effect residential prices, because it will not force materials prices above those in this year's first quarter, producers and building experts say.
SCG Distribution president Kajohndet Sangsuban said cement prices had already risen from between Bt1,400 and Bt1,500 a tonne in the second quarter to between Bt1,500 and Bt1,600 a tonne in the third, an increase of 6-7 per cent.
The increase followed higher demand for cement as developers raised their construction rates to replenish shrinking residential inventories, he said.
However, the new price is still lower than in the first quarter, when cement cost Bt2,200 a tonne.
The present price of steel is Bt19,000 a tonne, well below the first-quarter price of Bt37,000.
Kajohndet said he believed the higher cement price would not raise residential prices above those in the first quarter.
Prices for other construction materials, such as tiles, paint and sanitary-ware, remain about the same as those in the first quarter.
"When the cost of construction is compared with that in the first quarter, we believe residential prices will remain about the same as those in the first half of the year," he said.
Chantana Sukumanont, executive-committee deputy chairman for marketing and sales at Siam City Cement, said despite the significant likelihood of higher prices, cement would remain cheaper than in the first quarter. There will therefore be no affect on residential prices.
SCG Cement president Pramote Techasupatkul said demand for cement had improved "step by step".
"We saw it drop 10 per cent and 4 per cent, respectively, in the first two quarters of the year but believe it will show modest growth in the second half," he said.
Total cement consumption is expected to be about 24 million tonnes this year, slightly lower than nearly 25 million tonnes last year.
SCG plans to sell 17 million tonnes of cement this year. Of this, 9 million tonnes will be sold in the domestic market and the rest exported. The company is focused on boosting its cement exports to South Africa, the Middle East and Asean countries, Pramote said.
Earlier, property developers warned residential prices would increase 7-10 per cent next year. Of this, 4 per cent will come from the expiry of property tax incentives next March 28 and the rest from rises in the cost of construction materials.
If the government extends the period for tax incentives, residential prices will increase 5-7 per cent, because of higher prices for construction materials alone, said Thai Condominium Association president Atip Bijanonda.
SCG Distributon president Kajohndet Sangsuban believes the higher cement price will not raise residential prices above those in the first quarter.
SCG Distribution president Kajohndet Sangsuban said cement prices had already risen from between Bt1,400 and Bt1,500 a tonne in the second quarter to between Bt1,500 and Bt1,600 a tonne in the third, an increase of 6-7 per cent.
The increase followed higher demand for cement as developers raised their construction rates to replenish shrinking residential inventories, he said.
However, the new price is still lower than in the first quarter, when cement cost Bt2,200 a tonne.
The present price of steel is Bt19,000 a tonne, well below the first-quarter price of Bt37,000.
Kajohndet said he believed the higher cement price would not raise residential prices above those in the first quarter.
Prices for other construction materials, such as tiles, paint and sanitary-ware, remain about the same as those in the first quarter.
"When the cost of construction is compared with that in the first quarter, we believe residential prices will remain about the same as those in the first half of the year," he said.
Chantana Sukumanont, executive-committee deputy chairman for marketing and sales at Siam City Cement, said despite the significant likelihood of higher prices, cement would remain cheaper than in the first quarter. There will therefore be no affect on residential prices.
SCG Cement president Pramote Techasupatkul said demand for cement had improved "step by step".
"We saw it drop 10 per cent and 4 per cent, respectively, in the first two quarters of the year but believe it will show modest growth in the second half," he said.
Total cement consumption is expected to be about 24 million tonnes this year, slightly lower than nearly 25 million tonnes last year.
SCG plans to sell 17 million tonnes of cement this year. Of this, 9 million tonnes will be sold in the domestic market and the rest exported. The company is focused on boosting its cement exports to South Africa, the Middle East and Asean countries, Pramote said.
Earlier, property developers warned residential prices would increase 7-10 per cent next year. Of this, 4 per cent will come from the expiry of property tax incentives next March 28 and the rest from rises in the cost of construction materials.
If the government extends the period for tax incentives, residential prices will increase 5-7 per cent, because of higher prices for construction materials alone, said Thai Condominium Association president Atip Bijanonda.
SCG Distributon president Kajohndet Sangsuban believes the higher cement price will not raise residential prices above those in the first quarter.
SCG SEEKS THIRD GROUP OF POOR STUDENTS
The Siam Cement Group has begun a third year of its Home Mart Career Choice programme, aiming to provide training to 25-30 poor students who want to excel in knowledge of construction materials.
SCG Distribution's president Kajohndet Sangsuban said the programme, run in cooperation with Samut Prakan Technical College, had already produced 63 students and some of them were now working for SCG.
With an annual budget of Bt3 million, the programme targets mainly those who want to pursue careers in construction-material distribution centres, mainly Home Mart, which is an SCG business unit.
Kajohndet said the programme was open to students from around the country. However, SCG's management selected candidates by interview only.
"Our criteria involve the students'family incomes. That is our first priority in selecting students to receive the scholarship. Then we will look at their study profile. We want to give poor students the opportunity for education and a job," he said.
The company pays all of the expenses for a two-year course for successful candidates, averaging Bt100,000 per person per year.
Apinya Todmuang, 20, from Chiang Mai, said she decided to join the programme in 2007 because it met all of her expenses and was also a non-binding scholarship. Winning a scholarship helped her family by cutting her study costs. When she graduated, she was guaranteed a job with a good income of Bt7,000 per month. Apinya now works at a Home Mart distribution centre in Nakhon Pathom province.
Another successful graduate, Winai Jaroenwong, 22, came from Nakhom Phanom province to win an SCG scholarship. He now works at Home Mart Bang Na, with a salary of about Bt8,000 per month.
"I applied for this programme because I believed that when I graduated, I could find a job and help my family to have a better-quality life. This programme gave me an education and a job opportunity," he said.
Under the programme, SCG and the college give the students the knowledge and the experience to join the staff of a construction-materials distribution centre. They spend six months at college lectures, followed by six months on-the-job training at a Home Mart store, for a total of two years'study.
When they graduate, they can seek a job with Home Mart, but they are also free to do anything they want.
"This is a non-binding scholarship," Kajohndet said. However, graduates get better opportunities than other students because they hold both a college certificate and an SCG certificate for having passed through the Home Mart Career Choice programme.
Thirty-two students graduated from the programme's first year. Of these, 31 now work at Home Mart distribution centres.
The second group, totalling 31 students, will graduate next year.
Applications for the third group close next week. It is open for precollege students with a grade-6 or equivalent education. Examinations to select 25-30 successful candidates will be held on October 7 and 10 at examination centres in Roi Et province and Bangkok.
Instead of studying at Samut Prakan Technical College, the third group will attend Theerabhada Technology Vocational College in Roi Et, which opens on October 20. The change follows realisation that most of the successful students are coming from the North and Northeast of the country.
"We think this is a good way to pay society back [for our success], because if we create educational opportunities and jobs for poor people, they can create quality of living for both themselves and their family after they graduate," Kajohndet said.
SCG Distribution's president Kajohndet Sangsuban said the programme, run in cooperation with Samut Prakan Technical College, had already produced 63 students and some of them were now working for SCG.
With an annual budget of Bt3 million, the programme targets mainly those who want to pursue careers in construction-material distribution centres, mainly Home Mart, which is an SCG business unit.
Kajohndet said the programme was open to students from around the country. However, SCG's management selected candidates by interview only.
"Our criteria involve the students'family incomes. That is our first priority in selecting students to receive the scholarship. Then we will look at their study profile. We want to give poor students the opportunity for education and a job," he said.
The company pays all of the expenses for a two-year course for successful candidates, averaging Bt100,000 per person per year.
Apinya Todmuang, 20, from Chiang Mai, said she decided to join the programme in 2007 because it met all of her expenses and was also a non-binding scholarship. Winning a scholarship helped her family by cutting her study costs. When she graduated, she was guaranteed a job with a good income of Bt7,000 per month. Apinya now works at a Home Mart distribution centre in Nakhon Pathom province.
Another successful graduate, Winai Jaroenwong, 22, came from Nakhom Phanom province to win an SCG scholarship. He now works at Home Mart Bang Na, with a salary of about Bt8,000 per month.
"I applied for this programme because I believed that when I graduated, I could find a job and help my family to have a better-quality life. This programme gave me an education and a job opportunity," he said.
Under the programme, SCG and the college give the students the knowledge and the experience to join the staff of a construction-materials distribution centre. They spend six months at college lectures, followed by six months on-the-job training at a Home Mart store, for a total of two years'study.
When they graduate, they can seek a job with Home Mart, but they are also free to do anything they want.
"This is a non-binding scholarship," Kajohndet said. However, graduates get better opportunities than other students because they hold both a college certificate and an SCG certificate for having passed through the Home Mart Career Choice programme.
Thirty-two students graduated from the programme's first year. Of these, 31 now work at Home Mart distribution centres.
The second group, totalling 31 students, will graduate next year.
Applications for the third group close next week. It is open for precollege students with a grade-6 or equivalent education. Examinations to select 25-30 successful candidates will be held on October 7 and 10 at examination centres in Roi Et province and Bangkok.
Instead of studying at Samut Prakan Technical College, the third group will attend Theerabhada Technology Vocational College in Roi Et, which opens on October 20. The change follows realisation that most of the successful students are coming from the North and Northeast of the country.
"We think this is a good way to pay society back [for our success], because if we create educational opportunities and jobs for poor people, they can create quality of living for both themselves and their family after they graduate," Kajohndet said.
Wednesday, September 23, 2009
World steel production rises
Global crude steel production rose to its highest level in almost a year in August, figures from the World Steel Association showed on Monday, as steel mills restarted idled capacity due to increased orders.
The $500 billion industry is slowly recovering from one of the worst downturns ever and analysts expect output to rise further in the coming months, although the market is divided over whether the capacity start up is too rapid.
Crude steel production was 106.5 million tonnes in August, after rising steadily since April and up from 103.9 million tonnes in July, despite a 5.5% drop compared with August 2008.
"History tells you that demand tends to pick up faster than supply into an upturn," said analyst Jim Lennon at Macquarie Bank, referring to the highest monthly output since September 2008,when production totalled 107.9 million tonnes.
Output in China, the world's biggest producer and consumer of the metal,rose to 52.3 million tonnes in August,up 22% year-on-year and the highest ever monthly figure.
"The concern in the steel industry is that there is still overcapacity in the system and therefore there is a potential to oversupply the market.... I don't think there's any evidence of the steel mills increasing supply too fast at the moment," Lennon said.
But last week Mel Wilde, chairman of UK-based International Steel Trade Association (ISTA), said producers were "overfeeding the market" even though demand remained weak.
ArcelorMittal, the world's top steelmaker, does not agree. Chairman and chief executive Lakshmi Mittal, said last week he did not believe capacity restarts were taking place too soon.
In August, almost all the major steelproducing countries, including China,Japan, Germany, the US, Brazil and Russia reached their highest monthly output this year.
But for the first eight months of the year output remained 18.1% lower at 759.5 million tonnes compared with the same period last year.
Output in Europe and North America dropped by 32.1 and 38.7% year-onyear respectively in August. In the European Union output dropped compared with July, as Italy's production almost halved.
Production in the Middle East, where demand was buoyant last year due to booming infrastructure spending, rose by 14.9% in August compared with same month last year.
The $500 billion industry is slowly recovering from one of the worst downturns ever and analysts expect output to rise further in the coming months, although the market is divided over whether the capacity start up is too rapid.
Crude steel production was 106.5 million tonnes in August, after rising steadily since April and up from 103.9 million tonnes in July, despite a 5.5% drop compared with August 2008.
"History tells you that demand tends to pick up faster than supply into an upturn," said analyst Jim Lennon at Macquarie Bank, referring to the highest monthly output since September 2008,when production totalled 107.9 million tonnes.
Output in China, the world's biggest producer and consumer of the metal,rose to 52.3 million tonnes in August,up 22% year-on-year and the highest ever monthly figure.
"The concern in the steel industry is that there is still overcapacity in the system and therefore there is a potential to oversupply the market.... I don't think there's any evidence of the steel mills increasing supply too fast at the moment," Lennon said.
But last week Mel Wilde, chairman of UK-based International Steel Trade Association (ISTA), said producers were "overfeeding the market" even though demand remained weak.
ArcelorMittal, the world's top steelmaker, does not agree. Chairman and chief executive Lakshmi Mittal, said last week he did not believe capacity restarts were taking place too soon.
In August, almost all the major steelproducing countries, including China,Japan, Germany, the US, Brazil and Russia reached their highest monthly output this year.
But for the first eight months of the year output remained 18.1% lower at 759.5 million tonnes compared with the same period last year.
Output in Europe and North America dropped by 32.1 and 38.7% year-onyear respectively in August. In the European Union output dropped compared with July, as Italy's production almost halved.
Production in the Middle East, where demand was buoyant last year due to booming infrastructure spending, rose by 14.9% in August compared with same month last year.
TATA STEEL EXPECTS GROWTH IN DOMESTIC DEMAND AND ACTIVITY
The government's Thai Khemkhaeng (Invest for Strength) stimulus package has given steelmakers hope in a gloomy scenario, even encouraging major manufacturer Tata Steel (Thailand) to sell only in the domestic market next year.
Tata Steel president Santi Chankolrawee said the company will next year sell its steel only in the local market thanks to the stimulus plan, which will increase demand for steel in the country.
"The economic stimulus package of the government has boosted the confidence of steelmakers," he said.
He said steel manufacturers are banking on the Thai Khemkhaeng project, especially the water resource development, which is part of the package.
Most of Tata Steel's revenue comes from the domestic market, accounting for about 90 per cent and the rest from exports, he said. The company prefers domestic sales to exports because of higher margin. However, the country's economic slowdown had forced the company to diversify risk by exporting to overseas markets.
He said the steel industry in Thailand is expected to recover soon, which is reflected in the stable price of steel compared with the plunging price in 2008 after the financial crisis fully hit the global economy.
He said steel used to record its highest price at Bt36,000 per tonne before the global economy was hit by the financial crisis, after which it dropped steeply to Bt15,000 to Bt16,000. All steelmakers suffered inventory losses.
"However, the steel price currently is Bt20,000 per tonnes. We expect this trend for the next one to two years," he said.
The company expressed confidence in its revenue for fiscal year April 2009 to March 2010, with expectations of a net profit even though it recorded a net loss of Bt167.89 million in its first quarter ended June 2009.
Tata Steel (Thailand) predicts revenue for the fiscal year 2009 will reach Bt20 billion. Santi said the expected revenue was reflected by the increased capacity utilisation to 80 per cent, or 100,000 tonnes, a month from 60 per cent early. The figure is expected to reach 90 per cent, or 120,000 tonnes, a month, he added.
Although things are looking up for the steel industry, the company still has concerns about the price war among manufacturers due to oversupply.
Its parent company - Tata Steel Group - has set a policy that the operation in Thailand should not lose money this year.
Tata Steel Thailand is the market leader with a 30-per-cent share.
Santi said the company would resume its investment plan once the world economy recovers. It has cash flow of Bt3 billion, while its debt-to-equity ratio is 0.5 times. Because of its strong financial standing, it believes banks are willing to lend for the future investment.
Tata Steel president Santi Chankolrawee said the company will next year sell its steel only in the local market thanks to the stimulus plan, which will increase demand for steel in the country.
"The economic stimulus package of the government has boosted the confidence of steelmakers," he said.
He said steel manufacturers are banking on the Thai Khemkhaeng project, especially the water resource development, which is part of the package.
Most of Tata Steel's revenue comes from the domestic market, accounting for about 90 per cent and the rest from exports, he said. The company prefers domestic sales to exports because of higher margin. However, the country's economic slowdown had forced the company to diversify risk by exporting to overseas markets.
He said the steel industry in Thailand is expected to recover soon, which is reflected in the stable price of steel compared with the plunging price in 2008 after the financial crisis fully hit the global economy.
He said steel used to record its highest price at Bt36,000 per tonne before the global economy was hit by the financial crisis, after which it dropped steeply to Bt15,000 to Bt16,000. All steelmakers suffered inventory losses.
"However, the steel price currently is Bt20,000 per tonnes. We expect this trend for the next one to two years," he said.
The company expressed confidence in its revenue for fiscal year April 2009 to March 2010, with expectations of a net profit even though it recorded a net loss of Bt167.89 million in its first quarter ended June 2009.
Tata Steel (Thailand) predicts revenue for the fiscal year 2009 will reach Bt20 billion. Santi said the expected revenue was reflected by the increased capacity utilisation to 80 per cent, or 100,000 tonnes, a month from 60 per cent early. The figure is expected to reach 90 per cent, or 120,000 tonnes, a month, he added.
Although things are looking up for the steel industry, the company still has concerns about the price war among manufacturers due to oversupply.
Its parent company - Tata Steel Group - has set a policy that the operation in Thailand should not lose money this year.
Tata Steel Thailand is the market leader with a 30-per-cent share.
Santi said the company would resume its investment plan once the world economy recovers. It has cash flow of Bt3 billion, while its debt-to-equity ratio is 0.5 times. Because of its strong financial standing, it believes banks are willing to lend for the future investment.
SCG UPBEAT ON CONSUMPTION SURGE
Thailand's cement consumption is poised to see a slight positive growth in the second half of this year, driven by the government's stimulus package through infrastructure projects.
"This has helped restore the private sector's confidence," said the country's leading cement-maker, SCG Cement.
This is the first sign of growth for the industry in three years since the country was hit by political unrest and the global financial meltdown.
"Demand for cement has improved step by step. We saw it drop by 10 per cent and 4 per cent respectively in the first two quarters, and we believe that it would show a small growth in the second half of this year," said SCG Cement's president, Pramote Techasupatkul.
However, total cement consumption in 2009 is estimated to be around 24 million tonnes, slightly dropping from nearly 25 million tonnes last year.
He said SCG planned to sell 17 million tonnes of cement this year, 9 million on the domestic market and the rest through exports. He said it has focused on boosting its exports to South Africa, the Middle East, and Asean.
Meanwhile, the company yesterday launched "Elephant Marine Cement", a special formula of cement blending with slag that has double the strength of Portland cement. The new product will serve construction projects such as hotels and resorts near the sea or constructions in brackish water areas.
Pramote said SCG planned to achieve the sales of Bt100 million in the first year after this new product enters the market.
Presently, SCG Cement generates 12-13 per cent of sales revenue from high-value products, which would account for 20 per cent in the next five years.
"We allocated the budget of Bt180 million this year for R&D programme to develop eco-friendly products, confirming our continuous commitment to environment preservation. The budget would be increased to Bt200 million in the coming year," he said.
SCG Cement has invested Bt5.8 billion to create the Waste Heat Generator system, which will be completely installed in all cement plants by this year end. This project will not only save energy cost in the production process but also reduce emission of 300,000 tonnes of greenhouse gases per year.
"This has helped restore the private sector's confidence," said the country's leading cement-maker, SCG Cement.
This is the first sign of growth for the industry in three years since the country was hit by political unrest and the global financial meltdown.
"Demand for cement has improved step by step. We saw it drop by 10 per cent and 4 per cent respectively in the first two quarters, and we believe that it would show a small growth in the second half of this year," said SCG Cement's president, Pramote Techasupatkul.
However, total cement consumption in 2009 is estimated to be around 24 million tonnes, slightly dropping from nearly 25 million tonnes last year.
He said SCG planned to sell 17 million tonnes of cement this year, 9 million on the domestic market and the rest through exports. He said it has focused on boosting its exports to South Africa, the Middle East, and Asean.
Meanwhile, the company yesterday launched "Elephant Marine Cement", a special formula of cement blending with slag that has double the strength of Portland cement. The new product will serve construction projects such as hotels and resorts near the sea or constructions in brackish water areas.
Pramote said SCG planned to achieve the sales of Bt100 million in the first year after this new product enters the market.
Presently, SCG Cement generates 12-13 per cent of sales revenue from high-value products, which would account for 20 per cent in the next five years.
"We allocated the budget of Bt180 million this year for R&D programme to develop eco-friendly products, confirming our continuous commitment to environment preservation. The budget would be increased to Bt200 million in the coming year," he said.
SCG Cement has invested Bt5.8 billion to create the Waste Heat Generator system, which will be completely installed in all cement plants by this year end. This project will not only save energy cost in the production process but also reduce emission of 300,000 tonnes of greenhouse gases per year.
CONSTRUCTION MATERIALS PRICES TO BE CONTROLLED
Producers of construction materials will be allowed to hike their retail prices if the price of diesel increases another Bt5 a litre, the Commerce Ministry said yesterday.
The unavoidable increase of Bt5 a litre will directly affect transportation costs and the production costs of manufacturers, it said.
Construction materials are on a list of goods for which prices are controlled. The ministry recently extended price-control measures on the list of goods until the end of the year.
High on the ministry's agenda at present is the enhancement of domestic consumption in line with the government's Thai Khemkhaeng project.
Commerce Minister Porntiva Nakasai said that the ministry would attempt to curb price increases for construction materials until the end of this year to help shoulder consumers' expenses.
"Money from the Thai Khemkhaeng project, which will soon be injected into public investment, will partly stimulate growth in the construction industry. The government will try to curb the retail prices of these products to ensure a lower burden on consumers, while traders will not take the opportunity to increase their retail prices," Porntiva said.
After inspecting the prices of construction materials on Monday, the ministry found that most prices were within its recommendations.
As of September 2, the price of steel rod had increased slightly from Bt107.29 in August to Bt109.78, or from Bt21,500 to Bt22,000 per tonne. The retail price of mixed cement (Tiger brand) is quoted at Bt135 to Bt142 per 50-kilo bag, lower than the ministry's recommended price of Bt144 per bag. Portland cement (Elephant brand) is quoted at Bt145 to Bt156 per bag, while the recommended price is Bt161.
Internal Trade Department director-general Yangyong Phuangrach said the ministry would only consider allowing steel prices to increase if domestic diesel prices rose by another Bt5 per litre.
"The department will control prices as there are no serious negative factors to increase production costs for the remainder of this year," he said.
Moreover, he said the department would not allow any producers, in particular producers of condensed milk, soda and canned fruits, to increase their retail prices as sugar prices remain unchanged.
Commerce Minister Porntiva Nakasai said that the ministry would attempt to curb price increases for construction materials until the end of this year to help shoulder consumers' expenses.
The unavoidable increase of Bt5 a litre will directly affect transportation costs and the production costs of manufacturers, it said.
Construction materials are on a list of goods for which prices are controlled. The ministry recently extended price-control measures on the list of goods until the end of the year.
High on the ministry's agenda at present is the enhancement of domestic consumption in line with the government's Thai Khemkhaeng project.
Commerce Minister Porntiva Nakasai said that the ministry would attempt to curb price increases for construction materials until the end of this year to help shoulder consumers' expenses.
"Money from the Thai Khemkhaeng project, which will soon be injected into public investment, will partly stimulate growth in the construction industry. The government will try to curb the retail prices of these products to ensure a lower burden on consumers, while traders will not take the opportunity to increase their retail prices," Porntiva said.
After inspecting the prices of construction materials on Monday, the ministry found that most prices were within its recommendations.
As of September 2, the price of steel rod had increased slightly from Bt107.29 in August to Bt109.78, or from Bt21,500 to Bt22,000 per tonne. The retail price of mixed cement (Tiger brand) is quoted at Bt135 to Bt142 per 50-kilo bag, lower than the ministry's recommended price of Bt144 per bag. Portland cement (Elephant brand) is quoted at Bt145 to Bt156 per bag, while the recommended price is Bt161.
Internal Trade Department director-general Yangyong Phuangrach said the ministry would only consider allowing steel prices to increase if domestic diesel prices rose by another Bt5 per litre.
"The department will control prices as there are no serious negative factors to increase production costs for the remainder of this year," he said.
Moreover, he said the department would not allow any producers, in particular producers of condensed milk, soda and canned fruits, to increase their retail prices as sugar prices remain unchanged.
Commerce Minister Porntiva Nakasai said that the ministry would attempt to curb price increases for construction materials until the end of this year to help shoulder consumers' expenses.
SCG sees cement demand pick up
Thailand's cement demand is expected to rise in the second half of this year,due mainly to the start of construction of the government's megaprojects, said Siam Cement Group (SCG) Thailand's largest industrial conglomerate.
Disbursements of the central budget for megaprojects, part of the economic stimulus packages, will begin this quarter and help revive the local economy,said Pramote Techasupatkul, president of SCG Cement.
"Our economy has suffered for several years due to domestic political conflicts and the global economic slump.Now it begins to get better and growth should resume. From 2008 to the first half of this year, the cement industry was in a bad shape," said Mr Pramote.
Despite the bright prospect in the second half of the year, SCG expected to see total domestic cement consumption on par with last year's level, at 24 million tonnes, because of a 10% contraction in the first half, he said.
For SCG Cement, he expected domestic sales to be on par with last year at 9-10 million tonnes in line with the domestic market.
Mr Pramote also anticipated another 8-9 million tonnes to be shipped to export markets, resulting in total sales volume of 17-19 million tonnes, also the same level as last year.
"Demand in the first half of this year sank so steeply that even the recovery of demand in the second half could not offset the decline," Mr Pramote said.
Demand for cement peaked in 2007 at 28 million tonnes before sliding by 4 million to 24 million tonnes.
SCG has tackled the drop of demand by introducing innovative cement products aimed at new segments to offset the dwindling sales of conventional cement products. It has also explored new markets such as Africa and South Asian countries.
SCG started to shift its focus from the United States, which accounts for half of total sales volume, to other markets such as Africa and South Asia since 2006 after seeing its sales in the world's largest economy decline gradually.
Before the oil price crisis of 2007-2008,SCG spent 180 million baht on research and development for new cement products to tap into niche markets such as concentrated cement, which helps cut construction costs.
Last year, SCG launched aggregates cement to serve demand for energy saving in the farm sector.
It also invested 5.8 billion baht to improve energy consumption at its production facilities.
Its heat waste recovery programme could cut power bills by 280 million baht in the first quarter this year and cut greenhouse gas emissions annually by 300,000 tonnes.
SCG yesterday also re-launched its marine cement in order to expand its customer base to cover resort operators.
Marine cement has been developed to be resistant to corrosion by seawater,making it last as long as 40 years compared with 20 years for conventional cement.
SCG expects the sales of its marine cement to gradually rise to 100 million baht over the next 4-5 years from a marginal level now.
Shares of SCC closed on the Stock Exchange of Thailand yesterday at 231 baht, up two baht, in trade worth 455.4 million baht.
Disbursements of the central budget for megaprojects, part of the economic stimulus packages, will begin this quarter and help revive the local economy,said Pramote Techasupatkul, president of SCG Cement.
"Our economy has suffered for several years due to domestic political conflicts and the global economic slump.Now it begins to get better and growth should resume. From 2008 to the first half of this year, the cement industry was in a bad shape," said Mr Pramote.
Despite the bright prospect in the second half of the year, SCG expected to see total domestic cement consumption on par with last year's level, at 24 million tonnes, because of a 10% contraction in the first half, he said.
For SCG Cement, he expected domestic sales to be on par with last year at 9-10 million tonnes in line with the domestic market.
Mr Pramote also anticipated another 8-9 million tonnes to be shipped to export markets, resulting in total sales volume of 17-19 million tonnes, also the same level as last year.
"Demand in the first half of this year sank so steeply that even the recovery of demand in the second half could not offset the decline," Mr Pramote said.
Demand for cement peaked in 2007 at 28 million tonnes before sliding by 4 million to 24 million tonnes.
SCG has tackled the drop of demand by introducing innovative cement products aimed at new segments to offset the dwindling sales of conventional cement products. It has also explored new markets such as Africa and South Asian countries.
SCG started to shift its focus from the United States, which accounts for half of total sales volume, to other markets such as Africa and South Asia since 2006 after seeing its sales in the world's largest economy decline gradually.
Before the oil price crisis of 2007-2008,SCG spent 180 million baht on research and development for new cement products to tap into niche markets such as concentrated cement, which helps cut construction costs.
Last year, SCG launched aggregates cement to serve demand for energy saving in the farm sector.
It also invested 5.8 billion baht to improve energy consumption at its production facilities.
Its heat waste recovery programme could cut power bills by 280 million baht in the first quarter this year and cut greenhouse gas emissions annually by 300,000 tonnes.
SCG yesterday also re-launched its marine cement in order to expand its customer base to cover resort operators.
Marine cement has been developed to be resistant to corrosion by seawater,making it last as long as 40 years compared with 20 years for conventional cement.
SCG expects the sales of its marine cement to gradually rise to 100 million baht over the next 4-5 years from a marginal level now.
Shares of SCC closed on the Stock Exchange of Thailand yesterday at 231 baht, up two baht, in trade worth 455.4 million baht.
Government to monitor construction materials
The government will closely monitor the prices of construction materials,which are expected to rise due to increasing demand from accelerated statebacked infrastructure and investment programmes.
The stagnant construction industry is expected to receive a much needed shot in the arm in the final quarter from the government's second round of economic stimulus measures.
The 1.45-trillion-baht package, named "Thailand: Investing from Strength to Strength", would drive demand in the last three months of the year, said Commerce Minister Porntiva Nakasai.
Increased demand would cause the price of raw materials to also rise.
Domestic prices of building materials have started to pick up over the last two months,but the increase is yet to pass the ceiling recommended by the Internal Trade Department, according to the ministry's Porntiva: Aiming to latest survey.avoid price hikes.Mixed cement prices as of yesterday had increased to 140 to 145 baht for a 50-kilogramme pack compared with 135 to 142 baht in August. But prices of Portland cement dropped by 5 baht to 145 to 155 baht per pack in the same period.
Nine-millimetre steel bar rose by 2 baht to 109 baht per bar since August,while 100 metres of domestic electric wire increased by 22 baht to 621 baht due to surging global copper prices.
The ITD-recommended cap for mixed cement is 150 baht per 50kg pack, with the prices of Portland cement set at 160 baht, and 9mm steel bar at 136.75 baht.
Construction materials is one of 202 products on the ITD's priority watch list. Officials check the prices of those items twice a week to prevent unwarranted price increases.
Mrs Porntiva said the ministry was due to meet construction material manufacturers and distributors next week to discuss price trends and ask them to maintain the prices until the year-end.
Prices may have to be revised up if raw material costs have increased, she said.
The stagnant construction industry is expected to receive a much needed shot in the arm in the final quarter from the government's second round of economic stimulus measures.
The 1.45-trillion-baht package, named "Thailand: Investing from Strength to Strength", would drive demand in the last three months of the year, said Commerce Minister Porntiva Nakasai.
Increased demand would cause the price of raw materials to also rise.
Domestic prices of building materials have started to pick up over the last two months,but the increase is yet to pass the ceiling recommended by the Internal Trade Department, according to the ministry's Porntiva: Aiming to latest survey.avoid price hikes.Mixed cement prices as of yesterday had increased to 140 to 145 baht for a 50-kilogramme pack compared with 135 to 142 baht in August. But prices of Portland cement dropped by 5 baht to 145 to 155 baht per pack in the same period.
Nine-millimetre steel bar rose by 2 baht to 109 baht per bar since August,while 100 metres of domestic electric wire increased by 22 baht to 621 baht due to surging global copper prices.
The ITD-recommended cap for mixed cement is 150 baht per 50kg pack, with the prices of Portland cement set at 160 baht, and 9mm steel bar at 136.75 baht.
Construction materials is one of 202 products on the ITD's priority watch list. Officials check the prices of those items twice a week to prevent unwarranted price increases.
Mrs Porntiva said the ministry was due to meet construction material manufacturers and distributors next week to discuss price trends and ask them to maintain the prices until the year-end.
Prices may have to be revised up if raw material costs have increased, she said.
Saturday, September 19, 2009
SCG focuses on overseas coal trading
Siam Cement Group (SCG), Thailand's top industrial conglomerate, is ramping up its coal trading business overseas by opening processing and distributing hubs in Southeast Asia, China and India.
The expansion is expected to lift coal trading by 40-50% in value and turnover next year, said Kalin Sarasin, managing director of SCT Co, a trading arm of SCG.
By the third quarter of 2010, SCT will open hubs in south China, India, Malaysia and the Philippines, each at an investment of 20-30 million baht, he said.
SCT operates two coal hubs in Thailand, and one each in Cambodia, Vietnam and the Philippines.
Coal demand from food, cement,paper and cloth dye sectors is growing.With economies in Malaysia, the Philippines and Indonesia picking up while China's swells, coal demand should surge next year, Mr Kalin said.
SCT has about 30 major clients in Thailand that consume 3,000 tonnes of coal per month, and 100 smaller-scale clients with sales of 300 to 1,000 tonnes.Sales to small clients climbed to 300,000 tonnes in the first eight months from 180,000 tonnes a year earlier, he said.
The company sources coal from Indonesia's Sumatra and the Kalimantan portion of Borneo.
But sales are set to decrease to 3 million tonnes from 3.5 million last year after demand plunged in the first quarter.
Coal sales amount to 17-20% of SCT's core energy business. Other products include recycled goods and industrial products such as plastic, aluminum, tapioca, cement and other building materials.
Mr Kalin said SCT was also going to import biomass materials from Singapore in the current quarter to expand its energy business that had sourced products locally. It is also investing 60 million baht on a coal mixture pilot project in Ayutthaya that will create a value-added product to replace bunker oil to heat boilers.
The project is commercially viable when coal is $70 per tonne, as now. The coal mixture is 20% cheaper than bunker oil, he said.
SCT has 32 offices in 21 countries including Australia, Hong Kong, Taiwan,the US, Bangladesh, the UAE and Jordan.
SCG's coal business is the first of its kind in Thailand with the ISO 14001 environmental standard and the OHASAS 18001 standard for employees welfare.
Shares of Siam Cement (SCC) closed yesterday at 299 baht, up three baht, in trade worth 1.53 billion baht.
The expansion is expected to lift coal trading by 40-50% in value and turnover next year, said Kalin Sarasin, managing director of SCT Co, a trading arm of SCG.
By the third quarter of 2010, SCT will open hubs in south China, India, Malaysia and the Philippines, each at an investment of 20-30 million baht, he said.
SCT operates two coal hubs in Thailand, and one each in Cambodia, Vietnam and the Philippines.
Coal demand from food, cement,paper and cloth dye sectors is growing.With economies in Malaysia, the Philippines and Indonesia picking up while China's swells, coal demand should surge next year, Mr Kalin said.
SCT has about 30 major clients in Thailand that consume 3,000 tonnes of coal per month, and 100 smaller-scale clients with sales of 300 to 1,000 tonnes.Sales to small clients climbed to 300,000 tonnes in the first eight months from 180,000 tonnes a year earlier, he said.
The company sources coal from Indonesia's Sumatra and the Kalimantan portion of Borneo.
But sales are set to decrease to 3 million tonnes from 3.5 million last year after demand plunged in the first quarter.
Coal sales amount to 17-20% of SCT's core energy business. Other products include recycled goods and industrial products such as plastic, aluminum, tapioca, cement and other building materials.
Mr Kalin said SCT was also going to import biomass materials from Singapore in the current quarter to expand its energy business that had sourced products locally. It is also investing 60 million baht on a coal mixture pilot project in Ayutthaya that will create a value-added product to replace bunker oil to heat boilers.
The project is commercially viable when coal is $70 per tonne, as now. The coal mixture is 20% cheaper than bunker oil, he said.
SCT has 32 offices in 21 countries including Australia, Hong Kong, Taiwan,the US, Bangladesh, the UAE and Jordan.
SCG's coal business is the first of its kind in Thailand with the ISO 14001 environmental standard and the OHASAS 18001 standard for employees welfare.
Shares of Siam Cement (SCC) closed yesterday at 299 baht, up three baht, in trade worth 1.53 billion baht.
Wednesday, September 16, 2009
Building material demand up
The outlook is improving for steel and other construction materials with domestic demand reviving while prices surge with the global rebound, say analysts and executives.
Cement prices have risen 600 baht per tonne in the past two months, on expectations that the government's economic stimulus package will drive demand to resume annualised growth from the final quarter.
Steel prices have also increased, with hot-rolled steel prices now quoted at almost US$600 per tonne, compared with the bottom of $400 reached earlier this year, according to the Iron and Steel Institute of Thailand.
"Domestic prices have started picking up while demand has increased globally," said the institute's director, Vikrom Vajragupta."Prospects are clear that demand from the construction sector will be higher in the next couple of months when the rainy season ends."
The automotive industry is also recovering while the government's Thai Kem Kaeng -"Thailand: Investing from Strength to Strength"- infrastructure programme will further drive demand in the last three months of the year, he added.
Pichit Maipoom, president of SCG Building Materials, said the demand for building materials had improved since the second quarter, especially in the provincial market.
"We expect the industry in the second half will be on par with that of the same period of last year," said Mr Pichit.
Siam City Cement Plc (SCCC), Thailand's second-largest cement maker,also expects a better performance in the second half as demand for the entire year is projected to slide only 5-7% to 24-25 million tonnes.
"The overall situation is getting better in the latter half both domestically and globally," said SCCC's executive vicepresident Chantana Sukumanont."The local market in 2010 will be flat from this year in the worst case."
SCCC, which exports one-third of its output, expects its sales volume to be in line with the overall market this year.
Analysts are also upbeat on the industry's outlook, saying construction material stocks have surged by about 10% over the past week on expectation of benefits from government stimulus spending and projected better performance in the current quarter.
Tata Steel (Thailand) Plc (TSTH), the country's largest producer of construction steel, will be among the main beneficiaries as the domestic price for steel bars has edged up from 16-17 baht per kilogramme to almost 20 baht at present,said Surachai Pramuancharoenkit, an analyst at Kim Eng Securities.
Kim Eng expects domestic demand for cement to grow 10% in 2010 after falling 5% this year. The brokerage has raised SCCC's net profit estimates. It now projects 2009 earnings to be relatively unchanged from 2008, before jumping 22% to 3.83 billion baht next year.
Shares of Siam Cement (SCC) closed yesterday on the Stock Exchange of Thailand at 219 baht, up four baht, in trade worth 381 million baht. SCCC also rose four baht to 222 baht in trade worth 9.38 million baht. TSTH closed unchanged at two baht in trade worth 111 million baht.
Cement prices have risen 600 baht per tonne in the past two months, on expectations that the government's economic stimulus package will drive demand to resume annualised growth from the final quarter.
Steel prices have also increased, with hot-rolled steel prices now quoted at almost US$600 per tonne, compared with the bottom of $400 reached earlier this year, according to the Iron and Steel Institute of Thailand.
"Domestic prices have started picking up while demand has increased globally," said the institute's director, Vikrom Vajragupta."Prospects are clear that demand from the construction sector will be higher in the next couple of months when the rainy season ends."
The automotive industry is also recovering while the government's Thai Kem Kaeng -"Thailand: Investing from Strength to Strength"- infrastructure programme will further drive demand in the last three months of the year, he added.
Pichit Maipoom, president of SCG Building Materials, said the demand for building materials had improved since the second quarter, especially in the provincial market.
"We expect the industry in the second half will be on par with that of the same period of last year," said Mr Pichit.
Siam City Cement Plc (SCCC), Thailand's second-largest cement maker,also expects a better performance in the second half as demand for the entire year is projected to slide only 5-7% to 24-25 million tonnes.
"The overall situation is getting better in the latter half both domestically and globally," said SCCC's executive vicepresident Chantana Sukumanont."The local market in 2010 will be flat from this year in the worst case."
SCCC, which exports one-third of its output, expects its sales volume to be in line with the overall market this year.
Analysts are also upbeat on the industry's outlook, saying construction material stocks have surged by about 10% over the past week on expectation of benefits from government stimulus spending and projected better performance in the current quarter.
Tata Steel (Thailand) Plc (TSTH), the country's largest producer of construction steel, will be among the main beneficiaries as the domestic price for steel bars has edged up from 16-17 baht per kilogramme to almost 20 baht at present,said Surachai Pramuancharoenkit, an analyst at Kim Eng Securities.
Kim Eng expects domestic demand for cement to grow 10% in 2010 after falling 5% this year. The brokerage has raised SCCC's net profit estimates. It now projects 2009 earnings to be relatively unchanged from 2008, before jumping 22% to 3.83 billion baht next year.
Shares of Siam Cement (SCC) closed yesterday on the Stock Exchange of Thailand at 219 baht, up four baht, in trade worth 381 million baht. SCCC also rose four baht to 222 baht in trade worth 9.38 million baht. TSTH closed unchanged at two baht in trade worth 111 million baht.
Sunday, September 13, 2009
SCG sets up prefab venture with Sekisui
Prefabrication technology that can be used to complete a house in just three months is being introduced in Thailand through joint ventures between Siam Cement Group (SCG) and Japan's Sekisui Chemical.
With Modular Home technology from Sekisui, Japan's first and largest manufacturer of its kind, about 80% of house components are made in a factory and assembled into modules to be installed within one or two days on the construction site, said Pichit Maipoom, president of SCG Building Materials.
SCG, Thailand's largest manufacturer of building materials, plans to officially launch the modular homes for Thai customers early next year with a sales target of 100 units by the end of 2010. Annual sales are expected to hit 220 units by 2011, generating revenue of 1 billion baht per year, he said.
SCG yesterday signed two joint venture agreements with the Japanese partner.
Sekisui-SCG Industry Co, owned 51:49 by SCG and Sekisui with registered capital of 200 million baht, will manufacture the modular home components at SCG's factory in Saraburi.
SCG-Sekisui Sales Co, in which SCG controls 51% and Sekisui 49%with registered capital of 100 million baht, will sell and install the housing components.
The joint ventures target the highend of the housing market, which accounts for 10% of the 400,000 units built every year, said Mr Pichit.
Modular homes will be priced at 25,000 baht per square metre - or about 2.5 million for a 100-square-metre house.
Thailand is the first overseas market for Sekisui, which has offered modular home technology in Japan since 1970,said Teiji Koge, president of Sekisui Housing Co.
There are 450,000 Sekisui modular homes in Japan, where their sales last year generated 140 billion baht or 45%of the company's business.
"Thailand has a potential for developing this business. Combined with SCG's understanding of customer needs and the housing market, as well as its strong distribution channel, I believe this collaboration will answer Thai consumers' demands for convenient living,"said Mr Koge.
Wachirachai Koonamwattana, who is in charge of SCG's modular home technology project, said the technology would be aimed at end users, home developers and builders, starting in Bangkok and nearby provinces.
"We will offer customer care services,including home design and 20-year guarantees of the house structure and foundations, as well as equipment and systems. Besides, we will assist customers seeking construction licences and bank loans," said Mr Wachirachai.
If the launch is successful, SCG may build factories for producing modular homes elsewhere in the country, said Mr Pichit.
Siam Cement (SCC) shares closed yesterday on the SET at 219 baht, up 0.46,in trade worth 305.85 million baht.
With Modular Home technology from Sekisui, Japan's first and largest manufacturer of its kind, about 80% of house components are made in a factory and assembled into modules to be installed within one or two days on the construction site, said Pichit Maipoom, president of SCG Building Materials.
SCG, Thailand's largest manufacturer of building materials, plans to officially launch the modular homes for Thai customers early next year with a sales target of 100 units by the end of 2010. Annual sales are expected to hit 220 units by 2011, generating revenue of 1 billion baht per year, he said.
SCG yesterday signed two joint venture agreements with the Japanese partner.
Sekisui-SCG Industry Co, owned 51:49 by SCG and Sekisui with registered capital of 200 million baht, will manufacture the modular home components at SCG's factory in Saraburi.
SCG-Sekisui Sales Co, in which SCG controls 51% and Sekisui 49%with registered capital of 100 million baht, will sell and install the housing components.
The joint ventures target the highend of the housing market, which accounts for 10% of the 400,000 units built every year, said Mr Pichit.
Modular homes will be priced at 25,000 baht per square metre - or about 2.5 million for a 100-square-metre house.
Thailand is the first overseas market for Sekisui, which has offered modular home technology in Japan since 1970,said Teiji Koge, president of Sekisui Housing Co.
There are 450,000 Sekisui modular homes in Japan, where their sales last year generated 140 billion baht or 45%of the company's business.
"Thailand has a potential for developing this business. Combined with SCG's understanding of customer needs and the housing market, as well as its strong distribution channel, I believe this collaboration will answer Thai consumers' demands for convenient living,"said Mr Koge.
Wachirachai Koonamwattana, who is in charge of SCG's modular home technology project, said the technology would be aimed at end users, home developers and builders, starting in Bangkok and nearby provinces.
"We will offer customer care services,including home design and 20-year guarantees of the house structure and foundations, as well as equipment and systems. Besides, we will assist customers seeking construction licences and bank loans," said Mr Wachirachai.
If the launch is successful, SCG may build factories for producing modular homes elsewhere in the country, said Mr Pichit.
Siam Cement (SCC) shares closed yesterday on the SET at 219 baht, up 0.46,in trade worth 305.85 million baht.
Saturday, September 12, 2009
SIAM CEMENT UNIT IN JVS FOR MODULAR HOME TECHNOLOGY
SCG Building Materials has formed two joint ventures with a Japanese partner to introduce a new home-building technology to the Thai market.
The joint ventures with Sekisui Chemical aim to generate annual revenue of Bt1 billion by 2011.
President Pichit Maipoom said Sekisui-SCG Industry would be responsible for making housing components using modular-home technology, while SCG-Sekisui Sales would take care of sales and installation.
Sekisui-SCG has registered capital of Bt200 million, in which SCG Building Materials holds a 49-per-cent stake, while the remainder is acquired by the Japanese firm.
For SCG-Sekisui Sales, SCG Building Materials holds a 51 per-cent stake and Sekisui holds 49 per cent.
A factory in Saraburi will produce house components and assemble them into modules for installation at clients' location.
The annual capacity is 220 units of per year.
"We expect to sell 100 units by the end of next year," Pichit said, adding that the partner would transfer its technology to SCG Building Materials, which will supply more than 80 per cent of the components of the homes.
Teiji Koge, president of Sekisui Housing, a unit of Sekisui Chemical, said Thailand was the first foreign market for its products.
Sekisui was established in 1947 as a plastics company. The conglomerate now has several businesses, namely high performance plastics, urban infrastructure and environmental products as well as the housing business.
The environmental products and housing business is now the biggest, accounting for 45 per cent of total revenue last year (ended March 2009) or roughly Bt140 billion. It constructs about 20,000 housing units per year in Japan, where 80 per cent of house components are produced in the factory and assembled into modules ready to be installed on site.
The installing process takes only one or two days.
Wachirachai Koonamwattana, executive manager of the Modular Home Technology Project, said the cost of a modular home was roughly Bt25,000 per square metre, depending on the type and quality of building material.
The minimum home size is 100 square metres. So these homes are in the premium segment.
The strength of modular homes are that they are energy efficient and are more economical than other houses over a 30-year cycle.
The joint ventures with Sekisui Chemical aim to generate annual revenue of Bt1 billion by 2011.
President Pichit Maipoom said Sekisui-SCG Industry would be responsible for making housing components using modular-home technology, while SCG-Sekisui Sales would take care of sales and installation.
Sekisui-SCG has registered capital of Bt200 million, in which SCG Building Materials holds a 49-per-cent stake, while the remainder is acquired by the Japanese firm.
For SCG-Sekisui Sales, SCG Building Materials holds a 51 per-cent stake and Sekisui holds 49 per cent.
A factory in Saraburi will produce house components and assemble them into modules for installation at clients' location.
The annual capacity is 220 units of per year.
"We expect to sell 100 units by the end of next year," Pichit said, adding that the partner would transfer its technology to SCG Building Materials, which will supply more than 80 per cent of the components of the homes.
Teiji Koge, president of Sekisui Housing, a unit of Sekisui Chemical, said Thailand was the first foreign market for its products.
Sekisui was established in 1947 as a plastics company. The conglomerate now has several businesses, namely high performance plastics, urban infrastructure and environmental products as well as the housing business.
The environmental products and housing business is now the biggest, accounting for 45 per cent of total revenue last year (ended March 2009) or roughly Bt140 billion. It constructs about 20,000 housing units per year in Japan, where 80 per cent of house components are produced in the factory and assembled into modules ready to be installed on site.
The installing process takes only one or two days.
Wachirachai Koonamwattana, executive manager of the Modular Home Technology Project, said the cost of a modular home was roughly Bt25,000 per square metre, depending on the type and quality of building material.
The minimum home size is 100 square metres. So these homes are in the premium segment.
The strength of modular homes are that they are energy efficient and are more economical than other houses over a 30-year cycle.
Thursday, September 10, 2009
US STEEL PUSHES OBAMA TO CHOOSE WORKERS OVER TRADE
As presidential candidate Barack Obama pledged to stand up for workers by cracking down on imports from China.
Now President, Obama has promised to fight protectionism and trade barriers.
His administration must decide which path to take in two of the biggest US trade cases against China.
US Steel and the United Steelworkers Union are behind a complaint on imported pipe. The union, an Obama political ally, is also pushing for curbs on Chinese auto tyres.
"These are decisions that can't be avoided, so they'll be perceived as setting the tone for what the Obama administration trade policy is," said Timothy Keeler, the former chief of staff for the US Trade Representative's office. Keeler, a lawyer at Mayer Brown in Washington, represents GITI Tyre, the largest Chinese maker of tyres, in the trade case.
The decisions may help shape the future of US-China commercial relations. The two countries trade totalled more than $400 billion (Bt13.7 trillion) last year, making China the second largest US trading partner after Canada. China is also the largest foreign holder of US debt, with $776.4 billion.
The US International Trade Commission, an independent body, has ruled against Chinese importers in both cases. Because the complaints were brought under different provisions of trade law, the Commerce Department has the final say over tariffs on the pipe, used in oil and gas drilling, and Obama will make the call on tyres.
In a ruling scheduled to be released today, the Commerce Department must decide whether to place duties on $2.8 billion in steelpipe imports from China to compensate for subsidies that Chinese companies collect. The case was brought by the steelworkers; US Steel, the largest US-based steelmaker; US operations of Evraz Group, Russia's second-largest steelmaker; and Wheatland Tube.
The case is the largest so-called countervailing duty and dumping case filed against China, according to daniel Porter, a lawyer for Winston and Strawn, which represents Chinese producers in the case.
Obama must decide by September 17 on a petition by the steelworkers to cap or put tariffs on imports of $1.7 billion of tyres from China. It is a test of whether Obama will make good on a campaign pledge to reverse course from former President George W Bush and apply the so-called safeguard measures.
Bush turned down all four requests he received to impose duties or quotas on Chinese imports, saying the benefits of protection would be dwarfed by the costs. During the presidential campaign, Obama told the textile industry in a letter on October 24, 2008, that he would "decide those cases on their merits".
"The one thing that is on the line here is the president's credibility," said Scott Paul, executive director of the Alliance for American Manufacturing, a coalition of steel companies such as US Steel and the Steelworkers Union.
On April 14, 2008, presidential candidate Obama spoke to the United Steelworkers in Pittsburgh, a week before the contested Democratic primary in Pennsylvania.
"I have consistently supported in the Senate going after China," Obama said then, after embracing union president leo Gerard. "Here's the thing that people don't understand: China needs our market. Their economy is dependent on exports to the United States. We have bargaining power."
Obama, referring to China's purchase of US Treasuries, added this caveat: "It's pretty hard to argue with your banker," he said. "That's part of our problem with China."
Now President, Obama has promised to fight protectionism and trade barriers.
His administration must decide which path to take in two of the biggest US trade cases against China.
US Steel and the United Steelworkers Union are behind a complaint on imported pipe. The union, an Obama political ally, is also pushing for curbs on Chinese auto tyres.
"These are decisions that can't be avoided, so they'll be perceived as setting the tone for what the Obama administration trade policy is," said Timothy Keeler, the former chief of staff for the US Trade Representative's office. Keeler, a lawyer at Mayer Brown in Washington, represents GITI Tyre, the largest Chinese maker of tyres, in the trade case.
The decisions may help shape the future of US-China commercial relations. The two countries trade totalled more than $400 billion (Bt13.7 trillion) last year, making China the second largest US trading partner after Canada. China is also the largest foreign holder of US debt, with $776.4 billion.
The US International Trade Commission, an independent body, has ruled against Chinese importers in both cases. Because the complaints were brought under different provisions of trade law, the Commerce Department has the final say over tariffs on the pipe, used in oil and gas drilling, and Obama will make the call on tyres.
In a ruling scheduled to be released today, the Commerce Department must decide whether to place duties on $2.8 billion in steelpipe imports from China to compensate for subsidies that Chinese companies collect. The case was brought by the steelworkers; US Steel, the largest US-based steelmaker; US operations of Evraz Group, Russia's second-largest steelmaker; and Wheatland Tube.
The case is the largest so-called countervailing duty and dumping case filed against China, according to daniel Porter, a lawyer for Winston and Strawn, which represents Chinese producers in the case.
Obama must decide by September 17 on a petition by the steelworkers to cap or put tariffs on imports of $1.7 billion of tyres from China. It is a test of whether Obama will make good on a campaign pledge to reverse course from former President George W Bush and apply the so-called safeguard measures.
Bush turned down all four requests he received to impose duties or quotas on Chinese imports, saying the benefits of protection would be dwarfed by the costs. During the presidential campaign, Obama told the textile industry in a letter on October 24, 2008, that he would "decide those cases on their merits".
"The one thing that is on the line here is the president's credibility," said Scott Paul, executive director of the Alliance for American Manufacturing, a coalition of steel companies such as US Steel and the Steelworkers Union.
On April 14, 2008, presidential candidate Obama spoke to the United Steelworkers in Pittsburgh, a week before the contested Democratic primary in Pennsylvania.
"I have consistently supported in the Senate going after China," Obama said then, after embracing union president leo Gerard. "Here's the thing that people don't understand: China needs our market. Their economy is dependent on exports to the United States. We have bargaining power."
Obama, referring to China's purchase of US Treasuries, added this caveat: "It's pretty hard to argue with your banker," he said. "That's part of our problem with China."
Tuesday, September 8, 2009
CONWOOD MULLS BT500M PLAN TO BOOST OUTPUT
Conwood, a manufacturer of products that look like, and replace, wood in buildings, will spend Bt400 million to Bt500 million next year to increase its production capacity - if the economy recovers.
Conwood is a subsidiary of Siam City Cement, the country's secondlargest cement manufacturer.
CEO Suthipan Wacharopas said the company had sufficient cash flow and good credit for borrowing from banks to finance the investment.
At present, Conwood has a production capacity of 90,000 tonnes a year and would like to increase it by another 45,000 tonnes a year, to serve both domestic and international markets.
It had planned to proceed with the plan this year, in conjunction with an aggressive exporting campaign covering mainly Asian markets. However, the plan was deferred, due to the gloomy economic conditions.
Suthipan believes the market for wood-replacement products will likely recover in this year's fourthe quarter, following signs of improvement in the real-estate industry.
"If the real-estate business recovers - like many business figures in this industry predict - and there is no violence in Thailand's political situation next year, we're possibly going to invest roughly Bt500 million to expand the company's capacity in 2010," he said.
The domestic market for woodreplacement products has not been good this year, in line with the realestate industry. Conwood's first-half revenue fell 3 per cent year on year, and despite the expected recovery in the fourth quarter, it expects revenue this year of Bt800 million, down slightly from last year.
Suthipan said Conwood earlier hoped export sales would boost its revenue this year, but the outlook in foreign markets is no better than that at home. Taiwan is Conwood's only new export market this year. It also exports to Vietnam, Malaysia, Indonesia and the Philippines.
Conwood maintains its target for foreign markets to contribute 12.5 per cent of expected revenue of Bt1.2 billion in 2012.
Conwood is a subsidiary of Siam City Cement, the country's secondlargest cement manufacturer.
CEO Suthipan Wacharopas said the company had sufficient cash flow and good credit for borrowing from banks to finance the investment.
At present, Conwood has a production capacity of 90,000 tonnes a year and would like to increase it by another 45,000 tonnes a year, to serve both domestic and international markets.
It had planned to proceed with the plan this year, in conjunction with an aggressive exporting campaign covering mainly Asian markets. However, the plan was deferred, due to the gloomy economic conditions.
Suthipan believes the market for wood-replacement products will likely recover in this year's fourthe quarter, following signs of improvement in the real-estate industry.
"If the real-estate business recovers - like many business figures in this industry predict - and there is no violence in Thailand's political situation next year, we're possibly going to invest roughly Bt500 million to expand the company's capacity in 2010," he said.
The domestic market for woodreplacement products has not been good this year, in line with the realestate industry. Conwood's first-half revenue fell 3 per cent year on year, and despite the expected recovery in the fourth quarter, it expects revenue this year of Bt800 million, down slightly from last year.
Suthipan said Conwood earlier hoped export sales would boost its revenue this year, but the outlook in foreign markets is no better than that at home. Taiwan is Conwood's only new export market this year. It also exports to Vietnam, Malaysia, Indonesia and the Philippines.
Conwood maintains its target for foreign markets to contribute 12.5 per cent of expected revenue of Bt1.2 billion in 2012.
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