CENS reported that Taiwan based Tycoons Group Enterprise Co Limited has planned to construct an electric steelmaking plant in Thailand, in an effort to enhance its vertical integration to better compete in the country.
Already approved by the local competent authorities and estimated to cost between TWD 1.7 billion and TWD 2 billion, the construction plan is likely to come into practice in 2012 at the earliest, which will help the company's reinvested subsidiary, Tycoons Worldwide Group (Thailand) Public Co Limited, to secure additional supply of around 500,000 tonnes of steel and billets after the plant is operational.
With maximum annual output of 360,000 tonnes of wire rods, Tycoons Worldwide now is the second largest supplier of this kind in Thailand, which finished the first half of 2011 with sales revenue and net profits of TWD 4.522 billion and TWD 262 million, respectively. In addition to wire rods, the company's product range also covers steel wires, screws and nuts, which have been adopted by construction, automotive and machinery industries, with 60% of which exported.
Market observers pointed out that the company's construction of the new electric steelmaking plant in Thailand is especially significant at a time when the current steel billet supply in the country totals only around 4 million tonnes, far lagging behind local market demand for 11 to 13 million tonnes of various steel a year.
Therefore, the observers furthered, not only can the new plant help Tycoons Worldwide with additional steel billet supply to better compete in the country, but also it will enable Tycoons Group to boost its gross profits in the future.
In the meantime, institutional investors have positively rated the investment as well, considering that the ASEAN bloc has increasingly wielded among international free trade zones. With the new electric steelmaking plant along with Tycoons Worldwide, Tycoons Group is expected to enjoy an enhanced presence to reap more profits in Southeast Asia.
Sourced from cens.com
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