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Srithai sees net profit up, Indian expansion

Srithai sees net profit up, Indian expansion
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First Published: Fri, Sep 04 2009. 03 12 PM IST
Updated: Fri, Sep 04 2009. 03 12 PM IST
Bangkok: Srithai Superware PCL, Thailand’s largest plastic tableware maker, expects higher net profit in 2009 as it advances into the high-margin food and beverage packaging industry, its president said on Friday.
Anticipating growing demand from Asian consumers, Srithai will build a melamine production plant in India next year and plans another four melamine and plastics plants there later as part of a long-term expansion, Sanan Angubolkul said in an interview.
“Our net profit will definitely increase from last year,” he told Reuters.
“Our gross margin has increased because we shifted to the food and beverage packaging industry early this year. This industry has good margins and is growing globally. It’s a promising industry,” he said.
The company was on track to achieve its revenue target of 5.1 billion baht for the year, he said. Its 2008 revenue was 4.9 billion baht and net profit for the year was 99 million baht.
The firm’s average gross profit margin should increase about 2 percentage points to 20-21% this year and rise further next year, Sanan said.
The higher margin was partly due to the company’s recent upgrade of production technology and its cutback of low-margin auto parts and electricity products, he said.
Asian Demand
Srithai has planned 2 billion baht in capital expenditure for three years to 2010 to cut costs and beef up production efficiency. It spent a combined 1.2 billion baht in 2008 and 2009.
“We still have no big spending plan for next year. Our investment will focus more on the production process to cut waste and improve gross margins,” he said.
The new 70% owned plant in India would cost about 200 million baht in investment and the company expected a similar size of investment for the other plants, he said.
The new plant will start operations in 2011.
Sanan hopes that domestic consumption in Asia will continue to get a boost from stimulus spending by governments. Apart from India, its 90% owned melamine plant in Vietnam was contributing good profits, he said.
“We will expand melamine businesses in both India and Vietnam. These two markets have good potential,” he said.
Plastic products contribute about two-thirds of total revenue, with the majority of them in the food and beverage field. Melamine tableware makes up the rest of its revenue.
Srithai, whose main clients include IKEA and Sony Corp, earns about 20% from exports.
On Friday, shares in Srithai were unchanged at 5.15 baht, while the main Thai stock index rose 0.43%.
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First Published: Fri, Sep 04 2009. 03 12 PM IST