The company's sales revenue in 2006 was Bt22.36 billion.

Cement, concrete and plastic resin will be the main growth engine, TPIPL senior vice president Prasert Ittimakin said yesterday.

Despite the economic slowdown in the first half, higher government spending and a cut in interest rates should stimulate private-sector investment, particularly in real estate, he said.

"Cement demand has fallen but we believe that it will recover later in the year stimulated by higher private and government spending," he said.

"Sales [of cement] are expected to be around 0.5 per-cent higher, while low density polyethelene (LDPE) and concrete are forecast to grow by 4 per cent and up to 3 per cent, respectively. High-rise building construction should gather pace this year to beat new zoning regulations."

TPIPL's cement exports will be around 10 per cent higher compared to 12 per cent last year because domestic prices are higher than those overseas. Annual production is running at full capacity of 9 million tonnes, he said, adding that the LDPE spread this year would be close to last year at US$200 million (Bt6.6 billion) per tonne.

The gross margin is also expected to be close to that of last year at 23 per cent because there has been very little change in cement prices, demand and production from 2006.

Prasert said that the company would book a Bt2-billion gain if the Supreme Court rules in favour of the company's plan to buy back its debt at a discounted price.

In addition, it also stands to gain an additional Bt2.2 billion if it wins a case relating to hired machinery, which is being considered by the Supreme Court.

Regarding progress of its plan to refinance its outstanding debts of Bt10.1 billion to cut funding costs, Prasert said he expected that it would be completed this year.

The company will convert its foreign-currency-denominated debt into baht-denominated debt and extend the repayment period by way of a syndicated loan from commercial banks with a seven-year maturity, Prasert said.

Two banks are considering the deal and the company's interest cost would drop by 1 per cent if the plan is approved, he said.

"We believe that the refinancing arrangement will go through smoothly and if it does, the company will then issue debentures to fund a fourth cement plant," he said.

TPI Polene this year plans to invest in a 36-megawatt power plant, with a projected cost of Bt1.2 billion, Prasert said.

Around Bt600 million of the investment would come from the company's cash flow but once completed in 2009, the project should reduce operating costs by between Bt360 million and Bt500 million per year.

Siriporn Chanjindamanee

The Nation