New UBIS plant to kick off at end-2013, boost sealant output
UBIS (Asia)'s Samut Sakhon plant worth Bt171.72 million is expected to be ready for operation by the end of next year when it will raise the production of can-sealing compound required for UBIS Primatech, which specialises in such compounds.
Nawat Triyapongwattana, managing director and executive director, said at the Opportunity Day held recently by the Stock Exchange of Thailand that although the company's second-quarter sales dropped by 2 per cent, its first-half sales picked up sharply by 9 per cent over the same half last year. About 48 per cent of sales are from exports, with speculation that the proportion will increase in the future.
"Our great achievement is that we have now secured approval from Coca-Cola to use our can-sealing compound," Nawat said.
The move followed the licence agreement the company signed with Henkel, which has been recognised as a global company with brands and technologies for consumer and industrial businesses.
Henkel has been providing Coca-Cola with its surface-treatment product and proposed to Coca-Cola to add UBIS' sealing compound to its production line. The approval is not yet formalised but UBIS is hoping to see the result soon.
"Pairing up with Henkel enables us to engage with new markets, such as Europe and the United States. So far, we are the only Thai company in this business to be exploring foreign markets," he said.
UBIS prides itself with the quality of its products. With more than 30 years of experience, the company is well known among local businesses. It says it rarely receives complaints from customers and is constantly investing in research and development to ensure that the quality of its products meets international standards.
"The fact that Henkel chose to sign an agreement with us illustrates that we are a well-respected company and that we are able to make high-quality products," Nawat said.
The firm is also developing a can-lacquer formula that will help companies reduce their production costs. Improving its products also follows the trend of environmental friendly products, Nawat said.
"For example, one formula of our can lacquers can help reduce energy use by as much as 30 per cent."
The issue concerning investors and analysts the most is the company's imminent risk from swinging oil and rubber prices along with the unstable exchange rate. However, Nawat confirmed that investors should not fear that the company could face substantial losses because the production of can-sealing compound and lacquers requires the use of oil and rubber - highly volatile products.
A member of the board of directors said the price of each product lot was flexible, as the company did not make deals with its customers before it knew its actual cost of production.
"In the same manner, we do not agree to any fixed price of raw material from our suppliers. Thus we are able to make price adjustments," he said.
"Admittedly, there is always a time lag for this kind of procedure but eventually it all balances out," he said.