Saturday, July 18, 2009

Toyo-Thai competes for B63bn haul

Writer: PORNNALAT PRACHYAKORN

Published: 17/07/2009 at 12:00 AM
Newspaper section: Business

The newly listed contractor Toyo-Thai Corporation Plc (TTCL) is seeking to win contracts worth a total of 63 billion baht, mainly from the petrochemical industry, over the next 17 months, said Suvit Manomaiyanon, sales and contract director and general manager.

Major players in petrochemicals plan to invest to complete plants in the next three years to be ready for an uptrend in petrochemical prices, he said.

"Some companies have delayed their projects due to problems with cashflow, but big corporate groups like IRPC and SCG [Siam Cement Group] have started to review their investment plans in the third quarter," said Mr Suvit.

Local petrochemical operators cannot afford to delay or halt their investments as they must stay competitive, particularly with Chinese rivals, he said.

IRPC, a petrochemical subsidiary of PTT Group, is currently preparing terms of reference for its investment in a polypropylene plant worth US$80-100 million, for which TTCL plans to enter bidding in the third quarter.Another project whose investment plan is expected to be clear by the year-end is SCG's petrochemical plant in Vietnam, worth more than 60 billion baht.

The large international projects for which TTCL hopes to win contracts include the Moroccan government's fertiliser plants in Morocco worth $450 million and a 31-billion-baht petrochemical plant in Eastern Europe, which would be the company's first involvement in that region.

Overseas projects are attractive in their net margins, as high as 5% for the project in Eastern Europe, compared with an average domestic rate of 3%, said Mr Suvit.

TTCL hopes its proportion of revenue from overseas projects will increase to 50% in the next five years, up from 10-15% currently. TTCL has about 10 ongoing projects and 10 billion baht in backlog sales, about half of which will be realised as revenue this year and the rest next year.

Mr Suvit expects the company to record revenue of about 11 billion baht this year, on par with last year. Net profit is projected to rise by 40% in the first half of the year from 141 million baht in the same period last year.

TTCL recently won a contract worth 1.1 billion baht to build the world's largest hydrogen peroxide plant for MTP HPJV (Thailand), a joint venture between the Belgian chemical giant Solvay Group and US-based Dow Chemical.

Established in 1985, Toyo-Thai, specialising in engineering design and construction services, has listed on the Stock Exchange of Thailand since last month.

Shares of TTCL closed yesterday on the SET at 4.38 baht, up eight satang, in trade worth 161.5 million baht.

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