Samchai's vice chairman Pachawat Kunchayangkul said the company was the first in Thailand to produce structural steel pipe with a diameter range of 8-18 inches. Up to now, most Thai firms and even government projects have had to import large-diameter steel pipes from South Korea or Japan.

During this second half of the year, the company will export most of its production of big steel pipes to the Middle East and elsewhere in Asia, as well as Canada, Australia and the US, because of the local economic slowdown and delays in the government's mega-projects.

However, it is also focusing on the local market by persuading construction firms to use its Tubularge products instead of traditional steel I-beams, because of their advantage in lightness and strength.

Pachawat said the company launched its Tubularge line last month, involving the latest technology in producing large-diameter steel pipes. It has a production capacity of 180,000 tonnes per year. Large-diameter steel pipes now represent 30 per cent of Samchai's production, and it plans to lift that to 40 per cent next year.

He said the company was studying the needs of the petroleum-pipe market, because it represented a big potential for expansion. At present, the petroleum industry's demand for steel pipes amounts to 60 per cent of world production. However, the world's manufacturers can supply only 30 per cent.

This is a long-term plan, because the company will take at least one year to gain approval from the American Petroleum Institute to produce steel pipes for the petroleum industry. However, if it looks like it can achieve this goal, the company will spend Bt200 million to buy a machine for testing finished pipes.

Pachawat said the petroleum pipe market, both locally and internationally, was very attractive, because there were not many producers, and their profit margins were more than 20 per cent.

He said one of Samchai's reasons for wishing to supply the petroleum industry was to support PTT's huge projects for expanding its pipeline networks.

After merging with Inter Steel Industry, Samchai was able to expand its customer base, because Inter Steel was strong in galvanised steel-pipe production, while Samchai's strength lay in large-diameter structural steel pipe.

Pachawat said Samchai had enjoyed an advantage in merging with Inter Steel in that it was able to complete the deal without suffering a dilution effect. It sold its shares at Bt18, while their par value was only Bt5. Samchai has targeted revenues of Bt6 billion this year, up from Bt4 billion last year. It is also aiming at 30-per-cent sales growth next year, thanks to its Tubularge products.

Chalida Ekvitthayavechnukul

The Nation