Italian-Thai Develop-ment Plc, Thailand's leading construction firm, will spend Bt10 billion to expand into energy and resources in Thailand, Laos and Indonesia from this year to next, says company president Premchai Karnasuta.

The company's budget for the project will come from issuing bonds. This was approved by its shareholders yesterday.

Premchai said this new investment would increase its income from other operations by an estimated 10-50 per cent of total revenues within the next three years.

"Our expansion into other, related businesses will create a higher profit margin than we get from construction, which now generates a net profit of 6-8 per cent, while the group's other operations, such as cement, generate 10-15 per cent. We believe the new business will increase our net profit in the long run," he said.

The company reported total revenues of Bt38.9 billion and a net profit of Bt1.26 billion last year, with 10 per cent of total revenues coming from other businesses, which now include a cement plant in Saraburi and prefabrication plants in Pathum Thani and Ayutthaya.

The company's total revenues are expected to grow 18 per cent to Bt45 billion this year. Of that, 75 per cent will come from domestic sales and the remainder from projects abroad. Backlog projects, which will be completed between now and 2008, are worth Bt95 billion.

"The delay in the government's mega-projects will not affect our business performance this year," said Premchai.

The company also plans to spend Bt3.5 billion to increase its cement production capacity to 3 million tonnes annually by next year, from 1 million tonnes now.

Premchai said the new investment in its cement plant would come from the company's cash flow and loans from commercial banks.

Subsidiary cement firm Thai Pride Cement Co Ltd succeeded in generating higher income after start-up last December. In its one month of operation last year, the company generated Bt124 million worth of sales.

Premchai said the company expected Thai Pride Cement to generate revenues of up to Bt1.5 billion this year.

Somluck Srimalee

The Nation