Shares yesterday punched through the 700-psychological level to an almost 13-month high, propelled by the insatiable buying spree of foreign investors and the rally in Asian stock markets.The SET Index extended its sixday winning streak by starting the day with a gain before heading further north to close up 1.08 per cent at 703.09 points, off the day's high of 710.62. Turnover was brisk at Bt36.68 billion. The closing level was unseen since August 18 of last year.
PTT and its subsidiaries were at the centre of the rally. PTT advanced 1.54 per cent to Bt264, PTT Exploration and Production (PTTEP) gained 1.03 per cent to Bt147, Thai Oil (TOP) surged 2.17 per cent to Bt47 and PTT Aromatics and Refining (PTTAR) edged up 1.92 per cent to Bt26.50, while IRPC dipped 0.04 per cent to Bt4.28, off the day's peak at Bt4.40.
Mobile phone service providers also climbed up on a report that the telecom regulator will by the end of this year open bids for the 15year licences to provide longdelayed thirdgeneration services.
Advanced Info Service (ADVANC) advanced 3.42 per cent to Bt98.25, Total Access Communication (DTAC) jumped 13.92 per cent to Bt45 and True Corp (TRUE) soared 11.11 per cent to Bt3.20.
Foreign investors bought a net Bt3.8 billion of shares, bringing their total net purchases to Bt42.05 billion since the beginning of this year.
Most other major Asian bourses gained on the day. South Korean shares closed 2.30 per cent higher, the benchmark Nikkei225 index moved up almost 2 per cent, the benchmark Hang Seng Index closed up 1.05 per cent and the Straits Times Index of Singapore added 1.05 per cent.
The Shanghai Composite Index, which covers A and B shares, bucked the buoyant trend, losing 0.73 per cent.
Pongrat Ratanataranananda, vice president at Bualuang Securities, said the continuing fund flow and stabilised oil price kept the Thai stock market - dominated by energy stocks at over 30 per cent of overall market capitalisation - on a upward trend.
The absence of negative factor also boosted the stock market's euphoria.
The upside, however, would be limited following the strong rally over the past six months, she warned.
"The SET Index would reach 720-730 points in technical terms. Our house is upgrading the SET target this year from the previous estimate at 680 points," she said.
Among the securities under PTT's umbrella, she recommends investors snap up PTTEP, as its price has yet to reach a new high, unlike its parent and its associated firms.
Pichai Lertsupongkit, senior vice president of Thanachart Securities, took the same line.
The bullishness would continue, thanks to capital inflows, he said.
He could not estimate the overdue steep correction in the Thai stock market at the moment as investor appetite in risk assets is increasing following the emergence of economic recovery signs.
"It's possible to see the stock market plunge around 40-50 points as it has never consolidated in six months," he said.
Montree Sornpaisarn, CEO of Kim Eng Securities (Thailand), said his research house has upgraded the SET target this year to 750 points from 700.
The heavy trading turnover also indicated higher confidence of investors.
Margin loans extended by the country's largest brokerage by market share have risen significantly to Bt2.3 billion, compared with Bt1.3 billion under normal stock market conditions and Bt900 million during bear markets, he said.
Sukit Udomsirikul, assistant managing director of Siam City Research Institute, said the stock market's trek above the 700 level could be ascribed to capital inflows after the US dollar hit a oneyear low.
In the short run, the stock market's effervescence would be extended within a range of 730-680 points.
The local political situation would be a depressing factor, as the red shirts will hold a rally on September 19 and the police chief's resignation raised concerns about a rift in the coalition government, he said.
Friday, September 11, 2009
Thursday, September 3, 2009
Thai Caprolactam betters 2009 revenue prediction
The Thai petrochemical operations of Japan's Ube Group are expected to post slightly better-than-expected sales revenue of 18.5 billion baht this year, thanks to rebounding global demand.
Thai Caprolactam Plc (TCL) provides 9.2 billion baht in revenue to Ube Group (Thailand), which includes Ube Nylon (Thailand) and Thai Synthetic Rubber Co, said TCL vice-president Suriyon Vonpen. In 2008, the group sold 21.7 billion baht worth of goods, with 13 billion generated from TCL, he added.
"After last month's performance update, we are projecting revenue this year will be slightly better than the original forecast," said Mr Suriyon.
The demand for caprolactam, the material for producing nylon, has improved since the second quarter after plunging in the final quarter of 2008. The downturn forced TCL to cut its production in the first quarter of this year - the first-ever reduction since the $400-million factory opened almost 12 years ago.
"We have seen a V-shaped price rebound and we already ramped up production since the second quarter. Our plant in Rayong is now running at 95%of maximum capacity," he added.
Caprolactam's price bounced back to $2,000 per tonne after halving from its peak of $2,400 last year. Ammonium sulphate has also improved to $120-130 per tonne, but still lower than $200 in 2008. TCL, the only manufacturer of its kind in Southeast Asia, has the capacity to produce 110,000 tonnes of caprolactam a year, together with 460,000 tonnes of ammonium sulphate as a byproduct.
About half the caprolactam output is exported to Asian markets such as China and Taiwan, while ammonium sulphate serves the domestic fertiliser market only,as supply is short of annual demand of 700,000 to 800,000 tonnes, he said.
But the industry's outlook depends on the global economy. TCL conducted a feasibility study on expanding caprolactam capacity to 130,000 tonnes a year for about 1 billion baht. The expansion would take at least two years,hopefully enough time for the global economy to fully recover, he said.
Ube Industries controls 91% of TCL,set up by Prachai Leophairatana, the founder of Thai Petrochemical Industry (TPI) Group, now renamed IRPC Plc.
Thai Caprolactam Plc (TCL) provides 9.2 billion baht in revenue to Ube Group (Thailand), which includes Ube Nylon (Thailand) and Thai Synthetic Rubber Co, said TCL vice-president Suriyon Vonpen. In 2008, the group sold 21.7 billion baht worth of goods, with 13 billion generated from TCL, he added.
"After last month's performance update, we are projecting revenue this year will be slightly better than the original forecast," said Mr Suriyon.
The demand for caprolactam, the material for producing nylon, has improved since the second quarter after plunging in the final quarter of 2008. The downturn forced TCL to cut its production in the first quarter of this year - the first-ever reduction since the $400-million factory opened almost 12 years ago.
"We have seen a V-shaped price rebound and we already ramped up production since the second quarter. Our plant in Rayong is now running at 95%of maximum capacity," he added.
Caprolactam's price bounced back to $2,000 per tonne after halving from its peak of $2,400 last year. Ammonium sulphate has also improved to $120-130 per tonne, but still lower than $200 in 2008. TCL, the only manufacturer of its kind in Southeast Asia, has the capacity to produce 110,000 tonnes of caprolactam a year, together with 460,000 tonnes of ammonium sulphate as a byproduct.
About half the caprolactam output is exported to Asian markets such as China and Taiwan, while ammonium sulphate serves the domestic fertiliser market only,as supply is short of annual demand of 700,000 to 800,000 tonnes, he said.
But the industry's outlook depends on the global economy. TCL conducted a feasibility study on expanding caprolactam capacity to 130,000 tonnes a year for about 1 billion baht. The expansion would take at least two years,hopefully enough time for the global economy to fully recover, he said.
Ube Industries controls 91% of TCL,set up by Prachai Leophairatana, the founder of Thai Petrochemical Industry (TPI) Group, now renamed IRPC Plc.
Monday, August 31, 2009
Srithai, PTTCH plan "water lillies"
SRITHAI'S PROJECTED 2009 REVENUE +5%B5.1bn
Srithai Superware Plc (SITHAI),Thailand's largest plastic houseware producer is diversifying into products to combat evaporation in collaboration with a foreign innovator and PTT Chemicals,the country's largest olefin maker.
The fear of water shortages is rising with global warming and the accelerated evaporation of natural water, creating demand for tools to preserve water resources, said Srithai chairman Sanan Angubolkul.
His company plans to produce "water lillies",which are pro-+5%ducts for preserving ponds invented by an Australian company that Srithai declined to name.
Research has almost been concluded for the water lilies, which should be commercially available from 2010, he said.
"Simply speaking, water lilies are plastic modules that the user needs to patch together as a sheet to cover the surface of ponds or reservoirs," said Mr Sanan.
The water lillies will be made from a special formula of high-density polyethylene (HDPE) created in collaboration with PTTCH to meet the requirement of Srithai and the Australian inventor.
"We gather knowledge from each other to make something new to meet the new demand. With co-operation, development will be faster and cheaper as we can pool our resources together,"said Mr Sanan.
The United States and Australia are showing enthusiasm for the product as they are highly concerned about future water shortages, he said.
But other countries with a tropical climate could also benefit from the new product, Mr Sanan added.
PTTCH will develop the new HDPE to float while protecting water from heat and controlling water movement and shore erosion.
The project is expected to get patents
for its materials and design. But the business model is yet to be established as the project requires huge capital investment.
Srithai will invest mainly in advance,spending 800 million baht this year and another 400 million next year.
"We have to focus on technology at a time of economic slowdown. When the global economy returns to normal,we will be more able than our rivals to meet our clients' demands," said Mr Sanan.
Srithai expects its revenue this year to rise 5% to 5.1 billion baht from 4.92 billion last year due to strong demand in the packaging sector.
Shares of SITHAI closed yesterday at five baht, unchanged, in trade worth 5.48 million baht, while PTTCH shares were also unchanged at 66 baht in trade worth 202 million baht.
Srithai Superware Plc (SITHAI),Thailand's largest plastic houseware producer is diversifying into products to combat evaporation in collaboration with a foreign innovator and PTT Chemicals,the country's largest olefin maker.
The fear of water shortages is rising with global warming and the accelerated evaporation of natural water, creating demand for tools to preserve water resources, said Srithai chairman Sanan Angubolkul.
His company plans to produce "water lillies",which are pro-+5%ducts for preserving ponds invented by an Australian company that Srithai declined to name.
Research has almost been concluded for the water lilies, which should be commercially available from 2010, he said.
"Simply speaking, water lilies are plastic modules that the user needs to patch together as a sheet to cover the surface of ponds or reservoirs," said Mr Sanan.
The water lillies will be made from a special formula of high-density polyethylene (HDPE) created in collaboration with PTTCH to meet the requirement of Srithai and the Australian inventor.
"We gather knowledge from each other to make something new to meet the new demand. With co-operation, development will be faster and cheaper as we can pool our resources together,"said Mr Sanan.
The United States and Australia are showing enthusiasm for the product as they are highly concerned about future water shortages, he said.
But other countries with a tropical climate could also benefit from the new product, Mr Sanan added.
PTTCH will develop the new HDPE to float while protecting water from heat and controlling water movement and shore erosion.
The project is expected to get patents
for its materials and design. But the business model is yet to be established as the project requires huge capital investment.
Srithai will invest mainly in advance,spending 800 million baht this year and another 400 million next year.
"We have to focus on technology at a time of economic slowdown. When the global economy returns to normal,we will be more able than our rivals to meet our clients' demands," said Mr Sanan.
Srithai expects its revenue this year to rise 5% to 5.1 billion baht from 4.92 billion last year due to strong demand in the packaging sector.
Shares of SITHAI closed yesterday at five baht, unchanged, in trade worth 5.48 million baht, while PTTCH shares were also unchanged at 66 baht in trade worth 202 million baht.
PROSPECTING FOR SUCCESS
From humble origins, the Thai petroleum industry's training and certification centre for engineers and professionals has won international acclaim,writes Yuthana Praiwan in Songkhla
The Thai petroleum industry has established a global presence with the successful operation of its Technical Petroleum Training Institute (TPTI), now counted among Asia's leading training centres for the petroleum field.
Apart from being a regional training centre, the TPTI provides globally recognised certificates for oil engineers and technicians who have taken its courses.
Its standards are accredited by the Offshore Petroleum Industry Training Organisation (OPITO), a leading global oil-and-gas academy. Professionals with certificates issued by the TPTI would be recognised by the global industry as those certified by OPITO.
"Some engineers who work for the Australia-based Gorgon Petroleum fields came to take courses here instead of going to the training centre in the Middle East," said Kriengdej Assavalertplagorn,the TPTI's technical director.
The TPTI was established in 2000 when the country's demand for oiland-gas exploration and production had just emerged to develop skills among engineers to serve in the field.
After breaking even in only three years,the TPTI now sees its income rise to
more than 100 million baht.
"This is a good sign. The trust we have gained from multinational companies is proof that we have made a name in the global exploration and production industry," said Krairit Nilkuha, chairman of the board of trustee and a founder.
The idea to set up the institute originated from the need to reduce the high training and certification costs for engineers and professionals in the field.
"Initially, the TPTI was set up to serve only local demand as we didn't want to spend lots of money sending our engineers to training centres overseas. At that time, everyone took course in the United States, the Middle East and Singapore and it cost us more than 100,000 baht per person for one certificate. The training courses at those centres provided us with the same skills and knowledge," he said.
Moreover, holders of international oil-field certificates have to renew them every three years.
Oil engineers must have internationally recognised certification for their skills and knowledge to ensure they can handle any crisis when working in high-risk oil fields.
All of these mean oil-exploration companies and equipment suppliers in Thailand needed to spend a lot of money to certify their engineers, estimated at around 150 million baht a year, said Mr Kriengdej.
"So we came up with the idea of setting up a certifying body by ourselves.Not only would it help develop our staff's skills, local universities would also gain from developing their curricula," he added.
In its first year of operation, the centre successfully trained 400 professionals,with only US$4 million invested in the faculty and facilities including lecturers,buildings, laboratories and equipment.The seed fund was donated by the Industry Ministry's Department of Mineral Fuels and oil-exploration companies.
Initially, the TPTI held only a few training courses, mainly those involving well drilling and safety management.Today, the centre has developed more than 100 training courses including English for communication and presentation skills.
It has also branched out to five provinces from the base in Si Racha, Chon Buri province. It now has operations in Sattahip, also in Chon Buri province,Songkhla, Bang Pu in Samut Prakan province, and Bangkok.
The centre has a capacity to coach more than 10,000 people this year.
Last year, the TPTI trained 7,000 people,15-20% of whom were expatriates based in Thailand and Asia-Pacific, said Mr Kriengdej.
"Instead of paying 100,000 baht for each professional, they [oil-exploring companies] pay us just half that amount.Also, they could enjoy tourist attractions in the country," Mr Kriengdej added.
"The TPTI would not have come this far without the collaboration of upstream petroleum companies, which have provided us with skillful trainers, lecturers and facilities to help develop the centre until its quality is on par with the world standard," said Mr Krairit.
The Thai petroleum industry has established a global presence with the successful operation of its Technical Petroleum Training Institute (TPTI), now counted among Asia's leading training centres for the petroleum field.
Apart from being a regional training centre, the TPTI provides globally recognised certificates for oil engineers and technicians who have taken its courses.
Its standards are accredited by the Offshore Petroleum Industry Training Organisation (OPITO), a leading global oil-and-gas academy. Professionals with certificates issued by the TPTI would be recognised by the global industry as those certified by OPITO.
"Some engineers who work for the Australia-based Gorgon Petroleum fields came to take courses here instead of going to the training centre in the Middle East," said Kriengdej Assavalertplagorn,the TPTI's technical director.
The TPTI was established in 2000 when the country's demand for oiland-gas exploration and production had just emerged to develop skills among engineers to serve in the field.
After breaking even in only three years,the TPTI now sees its income rise to
more than 100 million baht.
"This is a good sign. The trust we have gained from multinational companies is proof that we have made a name in the global exploration and production industry," said Krairit Nilkuha, chairman of the board of trustee and a founder.
The idea to set up the institute originated from the need to reduce the high training and certification costs for engineers and professionals in the field.
"Initially, the TPTI was set up to serve only local demand as we didn't want to spend lots of money sending our engineers to training centres overseas. At that time, everyone took course in the United States, the Middle East and Singapore and it cost us more than 100,000 baht per person for one certificate. The training courses at those centres provided us with the same skills and knowledge," he said.
Moreover, holders of international oil-field certificates have to renew them every three years.
Oil engineers must have internationally recognised certification for their skills and knowledge to ensure they can handle any crisis when working in high-risk oil fields.
All of these mean oil-exploration companies and equipment suppliers in Thailand needed to spend a lot of money to certify their engineers, estimated at around 150 million baht a year, said Mr Kriengdej.
"So we came up with the idea of setting up a certifying body by ourselves.Not only would it help develop our staff's skills, local universities would also gain from developing their curricula," he added.
In its first year of operation, the centre successfully trained 400 professionals,with only US$4 million invested in the faculty and facilities including lecturers,buildings, laboratories and equipment.The seed fund was donated by the Industry Ministry's Department of Mineral Fuels and oil-exploration companies.
Initially, the TPTI held only a few training courses, mainly those involving well drilling and safety management.Today, the centre has developed more than 100 training courses including English for communication and presentation skills.
It has also branched out to five provinces from the base in Si Racha, Chon Buri province. It now has operations in Sattahip, also in Chon Buri province,Songkhla, Bang Pu in Samut Prakan province, and Bangkok.
The centre has a capacity to coach more than 10,000 people this year.
Last year, the TPTI trained 7,000 people,15-20% of whom were expatriates based in Thailand and Asia-Pacific, said Mr Kriengdej.
"Instead of paying 100,000 baht for each professional, they [oil-exploring companies] pay us just half that amount.Also, they could enjoy tourist attractions in the country," Mr Kriengdej added.
"The TPTI would not have come this far without the collaboration of upstream petroleum companies, which have provided us with skillful trainers, lecturers and facilities to help develop the centre until its quality is on par with the world standard," said Mr Krairit.
Thursday, August 27, 2009
ALLIANCE WANTS HALT TO MAP TA PHUT PROJECTS
The Anti-Global Warming Association and 43 Map Ta Phut villagers yesterday petitioned the Administrative Court to freeze all petrochemical projects planned for the industrial zone.
They also asked the court to reverse the Cabinet's resolution on Tuesday that allowed the issue of operating licences to some petrochemical projects.
The opponents said the licensing did not abide by Article 67 of the Constitution.
Association president Srisuwan Chanya said the projects would cause trouble for the public and environment.
Under the Constitution, all of the projects must conduct both an environmental-impact assessment and a health-impact assessment along with a public hearing. An opinion from an independent environmental body is also required.
Villager Suthi Atchasai said if the petition received no satisfactory results, then on September 9 the Network of Eastern People would gather at the Map Ta Phut Industrial Estate.
"We don't want to block investment but want to ensure that all investment is in line with the Constitution. We may block the port and the industrial estate, as well as the sites for the new plants, in order to send a message to all that pollution problems are not yet addressed," he said.
Recently, the Industrial Estate Authority of Thailand (IEAT) awarded long-awaited operating licences to four industrial projects worth Bt17.55 billion, including one each to the PTT Group and the Siam Cement Group.
Besides the four approved projects, 19 worth Bt305.45 billion are awaiting IEAT approval and 13 worth Bt59 billion are pending approval from the Industrial Works Department.
They also asked the court to reverse the Cabinet's resolution on Tuesday that allowed the issue of operating licences to some petrochemical projects.
The opponents said the licensing did not abide by Article 67 of the Constitution.
Association president Srisuwan Chanya said the projects would cause trouble for the public and environment.
Under the Constitution, all of the projects must conduct both an environmental-impact assessment and a health-impact assessment along with a public hearing. An opinion from an independent environmental body is also required.
Villager Suthi Atchasai said if the petition received no satisfactory results, then on September 9 the Network of Eastern People would gather at the Map Ta Phut Industrial Estate.
"We don't want to block investment but want to ensure that all investment is in line with the Constitution. We may block the port and the industrial estate, as well as the sites for the new plants, in order to send a message to all that pollution problems are not yet addressed," he said.
Recently, the Industrial Estate Authority of Thailand (IEAT) awarded long-awaited operating licences to four industrial projects worth Bt17.55 billion, including one each to the PTT Group and the Siam Cement Group.
Besides the four approved projects, 19 worth Bt305.45 billion are awaiting IEAT approval and 13 worth Bt59 billion are pending approval from the Industrial Works Department.
Wednesday, August 26, 2009
Local plastics producers optimistic
The outlook for the local plastics industry is improving in the second half of this year, thanks to demand for plastic packaging in the food and electronics industries, according to the Petroleum Institute of Thailand (PTIT).
According to the institute's research,plastic product growth contracted by 5% in the first half, reflecting poor purchasing power of consumers.
However, the study found that the trend in orders had started to rebound,said Kriengsak Wongpromrat, the assistant executive director of the PTIT.
Demand is rising for packaging for food, agricultural products and for hard disk drives but is sluggish among customers automotive, construction and electrical appliance industries.
"After declining continuously since the economic slowdown started (late last year), demand was steady early this month. That showed us the falling pace had stopped and may be starting to head upward this year, but this is hard to predict," said Mr Kriengsak.
Ready-to-eat food products have played a big role in lifting plastic demand, as more consumers cut expenses by eating more meals at home, he said.
"But [demand for packaging of] hard disk drives in the electronic sector has risen due to the global demand," he said.
Mr Kriengsak said that packaging businesses accounted for 40% of the local plastics industry, with 12% shared by electronics,7% by automobiles and parts, and 6% by construction materials.The total market was worth 370 billion baht last year with volume of 3.25 million tonnes.
PTIT, as an information service provider and researcher for the petroleum and related industries, was hired by the Office of Industrial Economics to collect data on the plastics sector. The aim is to better serve the demand of operators as well as develop the industry in the long term.
A total of 3,000 plastic and related industries out of 5,000 registered companies have participated by providing data to the institute. Major categories include 900 companies in packaging,followed by electronics, automobiles and construction materials.
Arthit Wuthikaro, the OIE directorgeneral, said the research would help operators gauge demand trends, such as for high-grade film products, which are now imported.
The OIE will join with the Board of Investment and other agencies to promote locally made film products through investment privileges, Mr Arthit said.
For the future, research will go toward the bioplastic industry, since concern about climate change is on the rise throughout the world.
According to the institute's research,plastic product growth contracted by 5% in the first half, reflecting poor purchasing power of consumers.
However, the study found that the trend in orders had started to rebound,said Kriengsak Wongpromrat, the assistant executive director of the PTIT.
Demand is rising for packaging for food, agricultural products and for hard disk drives but is sluggish among customers automotive, construction and electrical appliance industries.
"After declining continuously since the economic slowdown started (late last year), demand was steady early this month. That showed us the falling pace had stopped and may be starting to head upward this year, but this is hard to predict," said Mr Kriengsak.
Ready-to-eat food products have played a big role in lifting plastic demand, as more consumers cut expenses by eating more meals at home, he said.
"But [demand for packaging of] hard disk drives in the electronic sector has risen due to the global demand," he said.
Mr Kriengsak said that packaging businesses accounted for 40% of the local plastics industry, with 12% shared by electronics,7% by automobiles and parts, and 6% by construction materials.The total market was worth 370 billion baht last year with volume of 3.25 million tonnes.
PTIT, as an information service provider and researcher for the petroleum and related industries, was hired by the Office of Industrial Economics to collect data on the plastics sector. The aim is to better serve the demand of operators as well as develop the industry in the long term.
A total of 3,000 plastic and related industries out of 5,000 registered companies have participated by providing data to the institute. Major categories include 900 companies in packaging,followed by electronics, automobiles and construction materials.
Arthit Wuthikaro, the OIE directorgeneral, said the research would help operators gauge demand trends, such as for high-grade film products, which are now imported.
The OIE will join with the Board of Investment and other agencies to promote locally made film products through investment privileges, Mr Arthit said.
For the future, research will go toward the bioplastic industry, since concern about climate change is on the rise throughout the world.
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.
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.
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