Danieli Far East, a leading supplier of manufacturing equipment to the metals industry, will invest about Bt1 billion in the next fiscal year (starting from next month) to increase its capacity and expand its services to serve the demand of the global steel industry and maintain double-digit growth.
CEO Boonnarg Mockmongkonkul said yesterday that next year's investment budget would be spent on revamping old machines and developing automation software in the steel industry. The investment will come from its cash flow.
Danieli Far East has so far invested about Bt7 billion in Thailand, not including the amount earmarked for its next fiscal year. Its 375-rai manufacturing plant is located in Hemaraj's Eastern Seaboard Industrial Estate in Rayong and its business expansion would increase Danieli's workforce to 2,500 from the current 2,400.
He said besides new steel plants being established across the world, demand from existing steel mills that are overhauling their production technology was also interesting for the company.
In order to improve its competitiveness, |the company will need to upgrade its production.
The company expects the revamping of old machines and other upgrades to take a year to complete. This means that Danieli will start benefiting from its investment by mid next year.
"This new investment and those in the near future would focus on enhancing our production efficiency in order to produce quality and value-added products for the steel industry," Boonnarg said.
The CEO added that the steel industry in countries such as South Korea, Japan, China, Vietnam, India and the Middle East were still strong. In fact, some countries such as the Middle East, which formerly relied on steel imports, were now developing their own steel plants.
So, the demand for machines and equipment for steel mills will only grow.
He said because of the rising demand in promising markets, Danieli's revenue could double for several years or at least grow at a double-digit rate.
The company generated Bt10 billion in the 2008 fiscal year, though revenue during the 2009 fiscal year ending this month may not be double that of last year's, though it might grow at a double-digit rate.
Danieli Far East's production capacity in Thailand stands at 40,000 tonnes per year, which might rise to a maximum of 100,000 tonnes per annum.
The firm is working hard to generate revenue over the next two years.