Varopakorn signs 10-year auto-fin deal
Varopakorn plans to set up a Bt100-million manufacturing line for automobile fins this year, with sales of the new product expected next year to reach Bt100 million.
"Fins are used for automobile heat exchangers and oil coolers, intercoolers, heater cores, radiators and evaporators. The company - one of the top three makers of aluminium-rolled products - yesterday signed a 10-year agreement with Mitsubishi Aluminium, under which the Japanese firm will transfer technology and grant exclusive local distribution rights for auto-fin stock to Varopakorn. Mitsubishi Aluminum owns 21 per cent of Varopakorn. Varopakorn will pay Mitsubishi Aluminium an annual royalty based on its total sales. Varopakorn managing director Sanchai Chaixanien said domestic demand for auto-fin stock is estimated at 3,000 tones a year and is growing along with the expansion in car-making capacity, but supplies have all come from overseas sources such as Canada, Japan and Europe. One auto contains an average of three kilograms of fin stock. With Thailand targeting to become the Detroit of Asia and achieving auto production of 2 million cars by 2010, demand for auto-fins should increase from 3,000 tonnes valued at Bt400 million last year to 6,000 tonnes by 2010. "We expect to account for up to 50 per cent of the total market for auto-fin stock, worth up to Bt800 million in 2010," Sanchai said. Varopakorn earned a net profit of Bt93 million on sales of Bt1.54 billion in the first nine months of last year. About 50 per cent of sales came from fin stock for air conditioners, 40 per cent from aluminium rolls for packaging and the remaining 10 per cent from aluminium rolls for other products. The company ended last year with sales of Bt2 billion. It is now using only 75 per cent of its production capacity of 20,000 tonnes a year but with the new product the utilisation rate should approach 90 per cent. Sanchai said the company expected its sales to increase 10 per cent to Bt2.2 billion this year by focusing on exports, as signs point to sluggish growth in the local market for aluminium rolls. It plans to expand its export markets to the Middle East and India, primarily with cooling fins for air-conditioners.
Somluck Srimalee The Nation
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