Salee expands into parts for hard-disk drives
Salee Industry Plc, a medium-sized manufacturer of computer parts and computer and electrical trays, has expanded into making parts for hard-disk drives by acquiring a 75-per-cent stake in SC Wado Co Ltd.
Salee announced the Bt84-million investment yesterday, in which it bought 720,000 shares in SC Wado. Managing director Sathit Tatawatorn said the investment would expand Salee's customer base and make SC Wado a one-stop shop for computer and automotive parts. "The hard-disk drive parts business has grown rapidly and Thailand is now a major producer," Sathit said. "Moreover, through SC Wado, Salee can expand its business." To finance the investment, Salee's board of directors recently approved the issue of 95 million new shares to existing shareholders and the general public. Of these, 58 million shares have been allocated to existing shareholders at a ratio of one new share for every 2.5 existing shares at Bt1 per share. The new shares are expected to be issued within two months. Salee also plans to spend Bt165 million to make SC Wado a "one-stop shop". It will buy six die-casting machines costing Bt115 million for an upstream process producing raw materials for the manufacture of electrical and computer parts. The remaining Bt50 million will be invested in another factory at a Hemaraj industrial estate in Chon Buri. "Upstream investment is important as demand for raw materials has been really high," Sathit said. "SC Wado recorded a net loss in the first quarter because of a shortage of such materials." While Salee's major client for the upstream project will be SC Wado, it intends to supply other manufacturers as well. Salee's director for investor relations and business development, Supoj Soontarinka, said that following the takeover, Salee will expand its customer base by supplying thermoforming trays to both SC Wado and SC Wado's customers, who include Sumitomo Corp Singapore, Toshiba and Thai Kikuwa. "We expect SC Wado to register a revenue growth rate of 30 per cent this year, from Bt195 million last year," Supoj said. At present, SC Wado's output consists of 90 per cent computer parts and 10 per cent automotive parts. "We plan to raise the ratio to 50:50 within a few years," said SC Wado's managing director Mazaki Okoshi, who also hopes to seek listing on the Stock Exchange of Thailand in the next two years.
Chalida Ekvitthayavechnukul The Nation
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