Diamond Roofing Tiles plans to invest more than Bt300 million this year on expanding production, despite the effect of the economic slow-down on the property sector.

The firm's new line will boost production capacity of fibre cement from 500,000 tonnes a year to 540,000 tonnes. It is expected to start operation in the middle of next year.

Meanwhile, the firm has a five-year plan to spend about Bt300 million on purchasing more advanced technology, replacing asbestos with other raw materials such as sand and synthetic fibre.

Thailand has four fibre-cement manufacturers. The Siam Cement Group is the market leader, with slightly less than half the market, followed by Mahaphant with 35 per cent, Diamond Roofing Tiles (19 per cent) and Olarn (4 per cent).

Because the Siam Cement Group last week announced the removal of asbestos from its entire manufacturing process, the other three players may increase their share of the asbestos-product market in the short-term, said Satid Sudbuntad, Diamond Roofing Tiles vice president for sales and marketing.

"I believe there will be strong demand for asbestos roofs in the domestic market within five years due to the cheaper price and greater durability," he added.

However, the firm needs to prepare to invest in non-asbestos products, which are popular overseas, particularly in the United States, Europe, Japan and Vietnam. He said the company would continually expand its non-asbestos production process for wall planks and sheet board, while it would take around five years to completely remove asbestos from its roofing-tile production.

Although some building-material companies have announced lower revenue targets after their sales dropped dramatically in the first quarter, Diamond Roofing Tiles still targets to achieve revenues of Bt2.6 billion this year, up 10 per cent from last year, said Satid.

He said 90 per cent of revenues came from dealers and the remainder from housing projects. However, it will increase its sales through property projects to 10 per cent this year. Presently, it has a backlog from Power Line projects worth Bt50 million and Italian-Thai worth Bt80 million.

He said the firm would focus more on wall planks, where growth is higher than roman tiles and clay tiles.

Meanwhile, it will broaden its business risk by seeking more medium- and high-end customers. In addition, it expects to sell more value-added products, which have margins of more than 35 per cent, to this target group.

"We set aside Bt130 million this year to promote our new products and create brand awareness among medium- and high-end customers," he added.

Chalida Ekvitthayavechnukul

 The Nation