Danieli to spend Bt1.7 billion

Danieli Far East (DFE), the local unit of a global leader in the production of plant and machinery for the steel industry, will spend ¤32 million (Bt1.7 billion) to enlarge its operation in Thailand by increasing its production capacity from 25,000 tonnes a year to 40,000 tonnes.

DFE is a subsidiary of Italian firm Danieli & C Officine Meccaniche, a leading designer, manufacturer and assembler of plant for the steel industry with annual sales of more than ¤3 billion. The local subsidiary yesterday said the expansion was aimed at benefiting from the booming global steel industry.

CEO Boonnarg Mockmong-konkul said DFE saw a business opportunity when global steel prices reached record high levels. Steel firms in India and China are growing as well, so there is elevated demand for high-technology machines.

"Over the past few years, the percentage growth of DFE's revenue has been higher than that in the steel industry generally, because we manufacture value-added products. This means the company's revenue has grown more than 100 per cent a year. We've set our business plans according to clients' orders, so we've decided to invest more in Thailand," he said.

The company signed a land-purchase contract yesterday with Hemaraj Land and Development to buy an additional 121 rai of land for its expansion plans. It already owns 200 rai in the Eastern Seaboard Industrial Estate free zone, on which it has built a centre for designing and manufacturing steel-industry machinery and plant.

DFE will use 40 rai of the additional land to build a new plant to increase its production capacity. It is expected to be operating by June 2010.

All of its production is exported to international markets. Among its clients are world steel-industry leaders Arcelor Mittal and Tokyo Steel Manufacturing, as well as other firms in India, China, Vietnam, Taiwan and the Middle East.

As well, the company manufactures high-technology machinery like high-precision hydropneumatic automation systems.

Boonnarg said the remaining land bought yesterday would be used for further business investment over the next five years.