KPN Automotive forging 30% growth
KPN Automotive Plc, the country's top producer of forging products, expects overall company growth of 30 per cent and sales of Bt3.3 billion this year, mainly due to an increase in its exports.
Chief executive officer Kris Narongdej said yesterday that KPN Automotive expected to generate Bt1.62 billion in sales from die-cast products, up from Bt1.08 billion last year. Exports of die-cast products are expected to account for 36 per cent of overall sales, compared to 25 per cent last year. The company's product range includes steering and suspension systems, wheel frames and hubs, ball joints, axles and many different engine parts, especially for passenger cars, pickups and motorcycles. "The company is confident that sales will be on target because we have based our estimates on existing orders," Kris said, adding that orders have also been made by customers in the United States and Australia. He said the company had nearly concluded deals with companies in Japan, which will mean them signing up as new customers. Meanwhile, the proportion of indirect exports is expected to fall to 27 per cent this year from 32 per cent in 2005. The proportion of domestic sales is also expected to decrease, to 37 per cent from 48 per cent. For KPN's logistics joint venture with Singapore, Kris said sales from the venture were expected to grow to Bt750 million in 2006 from Bt598 million last year. He said KPN Plus - its die-cast franchising business - was not included in the target and would not branch out this year. However, the company this year aims to reduce costs to boost sales, targeting Bt120 million - up from Bt99 million last year. "The company's investment policy will be not aggressive, but we will focus our new investments on long-term contracts," said Kris. In addition, KPN has no policy to diversify and will try to balance customer accounts by seeking more clients in Japan and India. The CEO said the company would balance orders so that no single customer has more than 20 per cent of overall sales, preventing anyone from being in an excessively strong bargaining position with the company. In 2005, KPN posted Bt2.54 billion in sales, surging 47 per cent from 2004. Net profit was Bt176 million, compared to Bt111 million in 2004. The company expects to pay a dividend of Bt0.67 per share in May.
Watcharapong Thongrung The Nation
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