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Published on November 19, 2007

Thoresen Thai Agencies (TTA), the country's second largest shipping line, plans to spend up to Bt300 million over the next 18 months to complete the upgrade of its information technology systems.

The company is improving its IT systems for accounting, commercial and fleet management, said managing director ML Chandchutha Chandratat.

"After completion, all the programs will be linked so that we can see such real-time information as revenue and cash flow. Moreover, we will be able to make projections of these two or three months ahead," he said.

Chandchutha said all this was only phase one of the company's IT systems upgrade. Without elaborating, he said phase two would attract new business for the company.

To serve the rising demand for shipping, TTA also providesa time-charter service for about 10 vessels a month. 

Apart from its core shipping business, representing 90 per cent of revenue, TTA plans to invest in forward-freight agreements (FFA) as a risk-hedging tool.

A veteran in the field of finance, Chandchutha believes that the FFAs will attract participants and investors over the next few years, when risks are expected.

The company's business expansion plan is to keep its fleet size at 40 vessels, but increase the average size of its ships from the current 17,000-to-20,000 dead-weight tonnes to more than 28,000.

The company will order three or four new ships a year to gradually replace the older, smaller ships.

Chandchutha said ordering new ships at a cost of about US$40 million (Bt1.35 billion) was more worthwhile than buying used ships for about $65 million, even though they took time to be built. (Existing ships are often more expensive because they can be put into use immediately.) TTA could still catch the upward cycle in demand for shipping despite the wait of two to three years for new ships, he said.

Chandchutha said TTA would be able to pay promptly for the new ships through a combination of $170 million convertible debentures in dollar terms and syndicated loans worth $400 million as soon as the market permits.

Meanwhile, TTA is expecting higher returns from its subsidiary Mermaid Maritime, a listed firm in Singapore that provides services for mobile offshore drilling and tender rigs.

TTA posted consolidated net profit of Bt1.16 billion in its fourth quarter ending September 30, up from Bt861.83 million last year. Its consolidated net profit for fiscal 2007 was Bt4.97 billion, up from Bt3.5 billion the previous year.

Sasithorn Ongdee

 The Nation