Ichitan banks on CIMB backing in Asean market
Ichitan believes the strong regional network of Malaysia-based CIMB Thai Bank would support the growth of its ready-to-drink-tea business in Asean to cope with economic integration.
“The company has never been a customer of CIMB Thai but it’s upbeat that the bank’s network in Asean will help smooth its way into the region,” chief executive Tan Passakornnatee said yesterday at the signing for a Bt1.9 billion-credit facility from the bank.
“Ichitan is expanding in green-tea markets in Asean and is planning to set up plants in Myanmar and Vietnam,” he said.
CIMB Bank has a presence in eight countries in Asean.
The loan is for the third line of the second phase of Ichitan’s Rojana bottling plant in Ayutthaya, which will increase production capacity to 1 billion bottles and 400 million UHT (ultra-high-temperature treated) packs from 600 million bottles and 200 million UHT packs.
When the project is completed in the first quarter of next year, the company will launch exports.
Total sales are targeted to more than double to Bt10 billion by 2018 from Bt4.5 billion this year.
The firm will list on the Stock Exchange of Thailand on December 11 to raise funds for the Asean market strategy.
Asia Plus Securities is the financial adviser and CIMB Thai will be an underwriter for the initial public offering. Adisorn Sermchaiwong, senior executive vice president of CIMB Thai Bank, said it would approach Tan to become a high-net-worth customer and would try to get the payroll account for Ichitan Group.
Subhak Siwaraksa, president and CEO of the bank, said Ichitan was a new mid-corporate customer and it would help support loan growth in the second half of this year.
CIMB Thai Bank recorded loan growth of 16 per cent or more than Bt10 billion in the first half. Loans are projected to rise 20-25 per cent or between Bt30 billion and Bt40 billion for the whole year.
Besides Ichitan’s loan, the bank will extend Bt4 billion to Bt5 billion to other corporate customers this month.
On the retail side, the bank has to be more careful with providing unsecured loans as customers might use them to repay debts to other banks amid the current situation of high household debt and high financial burdens.
“It’s difficult to know if a customer has asked for personal loans from many banks. That behaviour makes us more cautious on giving out loans. However, the plan for unsecured loans is going ahead because we want to improve yields of retail loans this year to 6-7 per cent from currently 5.5-6 per cent,” he said.
Unsecured loans at CIMB Thai bank are expected to reach Bt8 billion this year from Bt6 billion as of the end of the first half.
