Eastern Group to raise capital from SET

The medium-sized company, which is in the process of listing on the Thai bourse, has grown from seed capital of Bt1 million to Bt2 billion in three decades. 

For the 2013 operational year ending March 31, EPG posted Bt6.5 billion in total revenue from a wide range of polymer and plastics that are used in the construction and building, automotive and packaging sectors under its core brand names such as Aeroflex, Aeroklas and EPP. 

“Innovation is the key business success for us. We have also registered 450 innovation patents and have more than 100 active patents,” executive director Chalieo Vitoorapakorn said.

He said the group’s business had grown considerably, with earnings before interest, tax, depreciation and amortisation growing by about 20 per cent annually. 

He said new capital was needed to reduce the company’s financial risk that might be incurred from loan-interest payments when the group’s sales were highly leveraged, as shown in a wide gap between revenue and capital. 

“We are confident in our innovation, that it will help push dramatic sales growth, as we have set a target to become a global player. So, we need to be assured of our future business expansion, with safeguards to protect from any crisis,” he said, adding the company survived the global financial crisis with no losses.

Established in 1978, the group has diversified its product range from rubber thermal/cool insulation products and accessories used in the construction and building sector to products such as bed liners, deck covers, canopies and crystal-clear plastic packaging.

Starting from a small-scale factory in Samut Prakan, the group – which operates all the businesses under its holding company – now manufactures its Aeroflex-branded rubber insulation products in China, where it has two operations, Germany, the United States, India, Russia, and Switzerland. 

“Our products are outstanding compared to our rivals, giving us the world’s third-largest market share,” Chalieo said.

He claimed that the Aeroflex brand had a global market share of 8 per cent while its US-based rival had the biggest share at 40 per cent followed by an Italian-based producer with 15 per cent.

As for the Aeroklas products and accessories, which are mostly designed for one-tonne commercial trucks, he said the group was considered the world’s largest producer of bed liners with a capacity of some 800,000 pieces a year. 

He claimed the canopies were 10kg lighter than other brands while the liners were hooked onto a designed plate system.

This technology meant there was no need to pierce the truck’s body and it was invented and developed by EPG’s in-house innovation unit, which currently operates under a wholly-owned subsidiary, EPG Innovation Centre Co. 

“As a result of that innovation, the group’s truck-lining beds have gained 90 per cent of market share in the domestic market, surging from only 5 per cent in 1995,” he said. 

Aeroklass products are provided to many brands of trucks such as Ford, Toyota, Mazda, Isuzu, Nissan, Mitsubishi and Honda.

Chalieo said the group had invented EPP-branded crystal-clear glasses that were used on Thai Airways International and Singapore Airlines flights as well as frozen-food packaging for 7-Eleven’s “EZY-GO” ready-to-eat boxed meals and McDonald’s in Asia. He said the company had deployed a multi-dimensional marketing strategy, including direct investing and joint ventures in an attempt to create volumes that delivered economy of scale.

EPG made a filing for its initial public offering with the Securities and Exchange Commission on September 11 and was expected to list on the Stock Exchange of Thailand by either the end of this year or early next year if it was given permission to.

Chalieo said the company planned to sell 700 million IPO shares to the public to give it paid-up capital of Bt2.8 billion with a par value of Bt1 each. The Vitoorapakorn family, however, would maintain an equity stake of 75 per cent of the paid-up capital. 

Siam Commercial Bank was appointed financial adviser for listing and the IPO price is being booked.