UMI may expand its product line

UMI chairwoman Paweena Laowiwatwong said yesterday that the company’s board of directors had approved an investment of not more than Bt400 million to acquire 400 million shares of TT Ceramic at Bt1 apiece, after a rehabilitation plan that was proposed by a group of TT Ceramics’ creditors to the Central Bankruptcy Court in March last year. The plan has been in progress since being ruled by the court in May last year.
Under the plan, after TT Ceramic’s capital reduction to write down a Bt1.3-billion accumulated loss, it will increase its capital by 500 million shares at par value of Bt1 each. Of that, Bt400 million will be acquired by UMI and the rest by creditors on a debt-to-equity conversion basis.
“TTC’s creditors chose our plan. If successful, UMI will become a major shareholder with an 80-per-cent stake while the creditors will hold the rest. However, the rehabilitation plan is in progress,” she said.
Paweena said UMI planned to boost the income of TT Ceramic by way of market expansion and cost reductions.
UMI is a manufacturer of ceramic tiles under the UMI, Duragres and Duragres-Lila brands.
The domestic ceramic-tile market this year is expected to be Bt30 billion, she said.
 TT Ceramic had undergone debt defaults since the global crisis of 2008 after demand for ceramic tiles shrank.
Construction of TT Ceramic’s factory in Saraburi, which has a capacity of 8 million square metres per year, was completed in 2007. The company’s revenue last year was between Bt800 million and Bt900 million, of which 70 per cent was domestic sales and the rest exports, Paweena said. On the acquisition plan for listed company Royal Ceramic Industry (RCI), she said UMI expected to receive a sale offering of UMI shares, accounting for a combined 32 per cent, which is in line with its expectation of 30-40 per cent. If the deal succeeds, UMI will become the biggest shareholder of RCI.
Sutin Youthanavarapon, marketing manager of UMI, said the tender offering for RCI shares would end on June 18. The investment in RCI will increase the company’s market share from 10 per cent to 15 per cent, raising its capacity to 26 million square metres per month from 20 million. Moreover, RCI will run at 90 per cent of its production capacity this year.
 “TTC and RCI will realise revenue in the next half year,” he said.
UMI recorded 3-per-cent growth in revenue last year to Bt2.49 billion with a net profit of Bt121 million. The company expects revenue next year to reach Bt2.7 billion, up 8 per cent from this year, Sutin said.