TMB Bank loan backs Chow Steel amid growing demand
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TMB Bank has lent Bt450 million to Chow Steel Industries, a manufacturer of steel billets, reflecting the bank's goal of providing financial support to upstream steel businesses.
Poomchai Chusakultanachai, TMB’s head of corporate banking, said yesterday that Chow Steel planned to secure many construction projects from the government policy to enhance the economy by investing in infrastructure. Therefore, a working-capital loan will strengthen Chow’s liquidity.
The steel industry this year has high opportunity to grow as the government works to rehabilitate the many provinces that were damaged by the floods late last year, Poomchai said. Thailand currently imports about a million tonnes of steel annually but the real demand is 5 million to 6 million tonnes.
He said the bank expected the uptrend in steel demand would support loan growth, as TMB was ready to support credit lines to clients that secured construction projects from the government. Moreover, the bank will offer transactional banking solutions to accommodate financial management.
TMB Analytics estimates that the fiscal budget will spread Bt64.74 billion into supply chains in the construction industry and Bt59.90 billion into the steel industry.
As well, the government has a five-year plan to invest Bt2.27 trillion in enlarging facilities ahead of the upcoming Asean Economic Community. The house expects this investment will lead to more than 90 projects, which could strengthen the construction industry.
Chow Steel chief executive officer Anavin Jiratomsiri said the company planned to expand production capacity by 20 per cent from 280,000-300,000 tonnes per year to serve the demand for steel billets in the country.
He said the company’s financial performance in the second quarter would be higher than in the first quarter because of rising sales volumes to existing customers as well as new ones that had turned to Chow for their steel-billet needs to reduce their reliance on imports. Customers want to manage their inventory and avoid currency volatility, he noted.
Chow Steel Industries estimates revenue growth this year of 20-30 per cent from Bt5.68 billion last year.
