CPAC Roof Tile, the manufacturer of CPAC Monier and Elephant concrete roofing tiles, plans to invest about Bt400 million on building two plants upcountry next year if the domestic market grows by an expected 10 per cent this year.
Managing director Noppadol Gaewthabthim yesterday said the company would keep an eye on market growth in the second half of this year.
If it can grow by 10 per cent from the same period last year, the company's production capacity, which will be increased to 25 million square metres per year by mid-2011, will not be enough to serve increasing demand.
CPAC Roof Tile will decide whether to invest in the new plants, which would cost Bt200 million each, in the final quarter of this year.
Noppadol said one of the new facilities would have a standard production capacity of 2.5 million square metres per year. The locations for the two plants will be considered later, but they would be sited upcountry, where the roof-tile market is growing, particularly in the North.
CPAC Roof Tile, a subsidiary in the Building Material Unit of Siam Cement Group, is doubling the capacity of its existing plant in Khon Kaen province to 5 million square metres per year.
The Bt250-million expansion will be ready for operation by the middle of 2011, lifting the overall capacity of the company to 25 million square metres from the current 22 million square metres.
The expansion comes after the roof-tile market in the first half of the year has seen better-than expected growth of more than 10 per cent year on year. The northeastern part of the country has witnessed the highest growth, at 20-22 per cent.
CPAC currently has seven plants in six provinces: two in Saraburi and one each in Nakhon Pathom, Nakhon Si Thammarat, Lamphun, Khon Kaen and Chon Buri.
"If the roof-tile market can grow by 10 per cent this year and continue the growth in 2011, our production capacity will not be enough to serve demand. CPAC has had no major investment since 2006, as the market either grew slightly or dropped in some years. So, we now have major investment starting this year to serve the increasing market," he said.
BEATING THE TARGET
Noppadol said CPAC's revenue growth in the first five months of the year was higher than targeted at 10 per cent. It expects first-half revenue of Bt1.6 billion, an increase of 16-17 per cent year on year, while the market is forecast to grow by around 10 per cent from last year to Bt2.5 billion.
The market has grown in the first half due to the extension of economic stimulus measures in the property sector until June, he said.
CPAC expects the market to experience slower growth at 10 per cent in the second half after the measures end.
"The highest revenue achieved by CPAC was in 2008, when we generated Bt3 billion. Then, it dropped to Bt2.8 billion in 2009 due to economic problems.
This year, we expect our revenue to exceed that in 2008 if the market can grow as we expect," he added.