Metro looks to Laos, Cambodia for heavy equipment sales
Metro Machinery, the biggest dealer of heavy construction equipment in Thailand, is looking over the borders to Laos and Cambodia, which are exploiting their abundant natural resources and racing to develop infrastructure.
The company will on October 9 ink two deals worth Bt1.5 billion each – one with a Laotian company in Bangkok and the other with US-based Caterpillar.
Metro will sell heavy equipment worth Bt1.5 billion to Laotian company Lanxang for work on a gold mine, while it will buy heavy equipment from its core partner Caterpillar worth Bt1.5 billion partly for its own inventory.
Laos and Cambodia have high business potential. Metro directly exports heavy equipment mainly for mining via Laos Metro in Laos. Its exports to Cambodia are managed by Metro Group of Cambodia. Its trade with the two countries averages Bt1.3 billion per year. It is also negotiating with Laotian gold miners for more purchase contracts.
Metro has dealers in Thailand, China, Laos and Cambodia. Its sales in Thailand are targeted at Bt8 billion, in China at Bt24 billion to Bt32 billion through its joint venture ECI-Metro Engineering Machinery Service, and in Laos and Cambodia at a combined Bt1.3 billion.
Chairman Thongsai Burapachaisri said yesterday that the company was also interested in accessing Myanmar, but there is already a local Caterpillar dealer. It is possible to access the market there indirectly through its trading partner Ital-Thai Development (ITD), which is the main contractor for the Dawei Port project.
“If ITD asks us to provide any product support and services that are beyond the capacity of the Myanmar dealer, we’ll do it,” he said.
ITD has ordered the first batch of Metro’s products worth Bt75 million.
Metro commands about 25 per cent of the Bt17.5-billion heavy-equipment market in Thailand. It plans to raise its share to 30 per cent soon. Demand for such heavy equipment will also increase through the government’s mega-projects.
The company maintains stock valued at Bt3.5 billion for delivery and emergency needs.
It plans to win the contract to supply heavy equipment to the Hongsa Power Plant in Laos. The project is a Thai-Laotian joint venture. It will use lignite coal as its fuel. An investment of Bt120 billion is required to have heavy equipment to support the overburdened removal work. Metro Group hopes to supply equipment worth Bt5 billion to the project. It has already spent Bt200 million to support the operation in Laos’ Hongsa province.
Thongsai also runs a property business whose land bank has reached about 6,000 rai (960 hectares), mainly in the East – Chon Buri, Rayong and Sa Kaew. It has developed not only residential condominiums but also rubber plantations and orchards.
