UKEM increases sales target to B2bn

       SET-listed Union Petrochemical Plc (UKEM) has revised upward its revenue target for 2009 to 2 billion baht, as demand is set to increase with the global economy.
       The chemical importer and distributor previously set a sales target of 1.5 billion to 1.8 billion baht this year, well off from the 2.53 billion in sales reported last year 2008.
       First-half sales totalled 952.5 million baht, down from 1.39 billion last year.But first-half profits stayed mostly unchanged, at 31.25 million baht compared with 31.89 million the same period last year.
       Perapol Suwannapasri, a UKEM as-sistant managing director, told investors at a briefing yesterday that lower interest rates and expenses helped the company support its net profits even as sales fell year-on-year.
       Lower oil prices helped push down chemical prices, leading the company to cut back its short-term working capital loans.
       UKEM still expects this year's gross profit margins to rise to about 13% compared with 9.51% in 2008.
       "The gross margin trend this year increased in the first and fourth months,but faded in May and June. However,the demand in the second half will come back, and we expect to see some increase in orders," Mr Perapol said.
       "We have some concerns for the fourth quarter that the use [of chemicals] will decrease. We have plans to focus on smaller customers in order to lower the risks of depending on large customers."
       Key customers for UKEM include ExxonMobil Chemical, PTT Chemical, PTT Phenol and IRPC. Over half of the company's solvents are used in the construction industry.
       Mr Perapol said that while that there had been a recovery for UKEM's customers in the electronics sector, the automobile sector remains sluggish, with production down 20% from last year.
       Crude oil prices may rise to $80 per barrel in the fourth quarter compared with $73-74 now. Crude oil is a raw material for solvents, said deputy managing director Perajed Suwannapasri.
       UKEM earlier this month announced that it would issue up to 165 million warrants to existing shareholders, with one warrant offered for every four shares held. The five-year warrants are convertible to common stock at a 1:1 basis at an exercise price of 50 satang per share.
       The company will also raise capital to 206.25 million baht from 165 million through the issue of 165 million new shares with par value of 25 satang per share for reserve for warrant holders.Shareholders will vote on the capital increase and warrant issue on Sept 30.The share register closes today.
       UKEM shares closed yesterday on the SET at 0.64 baht, up 2 satang, in trade worth 15.6 million baht.