TRU delays construction of new auto-parts factory

According to TRU president Sompong Phaoenchoke, the company will put off its plan to build a plant for spraying vehicle components and producing metal components from this year possibly to next year, depending on whether the economic conditions and sales orders are conducive. 

The company has already acquired 50 rai (8 hectares) of land to support the Bt500-million investment in the plant.

Such a delay in building the facility will not affect TRU’s current production capacity, which is still adequate to fill sales orders, Sompong said. Furthermore, the company has just invested Bt120 million in four new pieces of machinery, which boosted output capacity by 1,000 units a year, he said. 

The company has also revised down its revenue growth target this year to a level close to last year’s Bt3.78 billion. Initially, TRU set a target for this year’s revenue to grow 15 per cent from last year. Revenue in the first half of this year amounted to Bt1.87 billion, while net profit was Bt256 million. The company could not say if this year’s net profit would exceed that of 2012, but TRU expects lower gross and net profit margins than last year. In 2012, TRU generated Bt3.78 billion in revenue and net profit of Bt571 million, Sompong said. 

As for the overall automobile sector’s outlook for this year, TRU expects slower domestic sales to about 1.3 million vehicles, compared with 1.4 million units last year. However, foreign sales should continue to grow. 

Foreign investors’ view of the Thai automotive industry should remain positive as Thailand is a major automobile-manufacturing base in Asean and offers good logistics. Meanwhile, the weak baht should boost exports of vehicle components, Sompong said.