Chonburi Concrete sets sights on purple-line deals

Chonburi Concrete Products (CCP) intends to bid for a new project worth Bt1 billion to Bt2 billion, and it believes has a 50-per-cent chance of securing the contract. CCP will set up a subsidiary with a Japanese partner to expand its original business.

Meanwhile, Tipco Asphalt (Tasco) plans to invest Bt2 billion to boost its production capacity, purchase land and build a crude-oil depot.

According to CCP's managing director, Artit Theepakornsukkasame, the company is in the process of submitting its bid for the Bt1 billion to Bt2 billion new project, which involves the state's Skytrain purple-line project and some private sector projects.

CCP believes it could secure orders for 50 per cent of the total project value. The first project this year, which CCP hopes to seal, is the Skytrain purple-line project for which the company has already submitted its bid. Currently, CCP has a work backlog worth Bt2 billion, which are expected to generate revenue within one and a half years.

CCP is confident of securing the Skytrain purple-line project as CCP's team last year had worked on the blue-line project. Hence, CCP hopes to receive at least 50 per cent of the remaining Bt1 billion to Bt2 billion project for which it is bidding.

Currently, CCP is negotiating with two foreign joint-venture prospects, from China and Japan. CCP hopes to conclude the joint-venture talks by the third quarter of this year. CCP plans to set up a subsidiary to expand its current business in concrete products in preparation for the Asean Economic Community (AEC) in 2015. Foreign firms expect Thailand to have a vital AEC hub role.

This year, CCP invested Bt50 million in machineries to boost its smart concrete annual production capacity from 3 million square metres by another 1.5 million square metres per year. CCP expects to spend Bt20 million in the second quarter of this year, or a total of about Bt50 million this year to boost its production capacity of smart-concrete products to meet rising demand.

According to Chaiwat Sriwanvat, Tipco Asphalt's managing director, Tasco plans to spend Bt2 billion this year to boost production capacity in asphalt and improve the productivity for various products based on a 10 per cent projected sales growth this year, to 1.52 million tonnes.

Tasco expects total revenue this year of Bt42 billion, up from the Bt38.4 billion in 2012.

Meanwhile, Tasco plans to buy more crude oil this year - 8 million barrels to support growing demand. Tasco has already bought 3.5 million barrels of crude oil.

The company plans to expand its refinery plant capacity in Malaysia this year by 20 per cent to 30,000 barrels per day against the current 25,000 barrels per day. It is expected to be completed by the fourth quarter of this year, and commence operations in early 2014. Such production capacity expansion is necessary to meet future demand, as the company currently utilises 90 per cent of its production capacity.

Moreover, the company also plans to use natural gas to run its oil refinery plant, expected to begin this April. This should help cut production cost by about 50-80 cents per barrel. The company also plans to buy more land to set up a crude-oil depot and finished products.

The trading prices for asphalt were stable during the winter in China where there are no construction activities, but prices should pick up when construction activities resume after winter, Chaiwat said.