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Published on March 1, 2008

Thai Industrial and Engineering Service's revenue is set to reach Bt1.5 billion this year, slightly lower than last year, due to fierce competition in the construction industry and the rising cost of materials.

"The delay in mega-projects has instigated large contractor companies to compete in the same market with us," said TIES executive director Terapol Temsuk. "Besides, main raw material prices such as steel have risen considerably."

He said the company was hit by external factors including rising oil prices and the US sub-prime crisis that have decelerated investment in the property sector.

TIES reported revenue was Bt1.59 billion last year, up from Bt1.191 billion in 2006. However, it posted a net loss of Bt216.66 million, a considerable decline from a net profit of Bt50.35 million in the previous year.

Both bidding and pricing competition caused its gross profit margin to decline from Bt188.1 million in 2006 to a loss of Bt12.38 million last year.

The company will focus on bidding for high-margin projects in order to reduce the risks of loss like last year, Terapol said.

The average margin in the overall market is forecast to fall to around 6-8 per cent

this year from 10 per cent last year.

Of revenue, Terapol said 60 per cent came from industrial plants and the remaining 40 per cent from hospitals, department stores, residences and schools.

TIES has a project backlog worth Bt840 million that will be recognised as revenue this year.

Meanwhile, it has submitted documents to join four bidding projects with a combined value of Bt500 million. Two are industrial plants and two are condominiums.

The company has planned to increase its projects abroad by becoming a subcontractor for ECC International Corporation. It is scheduled to finalise international projects in the third quarter this year.

"We have no investment plan this year, but we will focus on improving our staff and enhancing advanced technology to cut production costs and better utilise raw materials," Terapol said.

Chalida Ekvitthayavechnukul

The Nation