Thai Yuan Metal eyes 20% growth in 2008

Business News - Tuesday December 11, 2007

STEEL / INVESTMENT

Thai Yuan Metal eyes 20% growth in 2008

POST REPORTERS

Thai Yuan Metal Plc (TYM), the SET-listed steel trading and coil centre service provider, expects its business to grow by 20% next year thanks to strong steel consumption in the domestic market and the tendency of product prices to rise, according to managing director Boonchai Jirapongtrakul.

The company posted revenue of 4.07 billion baht for the first nine months of this year with a net profit of 72.2 million baht, down from 89 million in the same period last year. In 2006 it had total revenue of 4.27 billion baht and a net profit of 116 million.

Mr Boonchai said steel consumption was rising in line with the growth of steel users, including the construction, electrical appliance and automobile industries. Government megaprojects would also boost growth, he said.

''We hope to see the market recover after the new government is set up after the election,'' he said.

The company is expected to increase its production capacity of steel-sheet cutting to 80,000 tonnes a year, up from an earlier plan to increase capacity to 50,000 tonnes.

The company now operates one coil service, which provides steel-slitting and cutting services. It has a full production capacity of 113,500 tonnes per year. The plant is running near full production capacity so far. TYM's capacity will jump to 200,000 tonnes a year once the expansion is completed.

Its cutting and slitting capacity is larger than expected due to an adjustment in its investment plan. Previously, it had planned to expand both cutting and slitting operations, as well as steel-pipe production.But the company abandoned the steel-pipe expansion project because Sahaviriya Steel Group, the largest hot-rolled coil maker, expanded its pipe production. To avoid competing with the steel giant, TYM decided to spend its entire investment budget on only its coil service centre.

Furthermore, it has been appointed by Sahaviriya as an authorised pipe dealer. Its steel-pipe factory currently produces a total capacity of 35,000 tonnes a year.

''We are still spending the same budget of 40 million baht of investment, but only making an adjustment,'' said Mr Boonchai.

TYM expects the expansion to be finished in the first quarter of 2008.

TYM shares closed on Friday on the Stock Exchange of Thailand at 4.38 baht, unchanged, in trade worth 45.4 million baht.

By : Bangkok Post