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Chonburi Concrete to keep price hikes low

DESPITE heavy competition, Chonburi Concrete Product was forced by rising costs of raw materials - by an average of 8 per cent - to jack up its prices by 4-5 per cent in the first half of the year, its managing director says.

"We cannot increase our prices by as much as our raw-material costs have risen because the market has high competition. However, we had to increase them to keep our profit margin from falling lower than 10 per cent," Artit Teepakornsukkasem said.

Despite this challenge, the company is sticking to its revenue target of 10-per-cent growth to Bt2.9 billion this year. In the first quarter, it recorded revenue of Bt741.61 million, up 17.88 per cent year on year, and net profit of Bt67.20 million, up 63.46 per cent. Up to 60 per cent of its revenue came from government projects.

Chonburi Concrete supplies construction materials, including those for prefabrication. It has a backlog of orders worth Bt1.8 billion, up to half of which will be delivered to customers and booked as revenue this year. As a result, it is confident of achieving its revenue target, Artit said.

He added that the company planned to invest between Bt20 million and Bt30 million in the second half to increase its production capacity for prefab materials from 20,000 square metres per month to 22,000sqm. The investment budget will come from the company's cash flow.

"We decided to expand our production capacity to support the demand we expect to rise from the National Council Peace for Order's investment in infrastructure projects," Artit said.


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