Arrow Syndicate enjoys strong quarter, looks for market segments
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ARROW Syndicate, which installs electrical-conduit systems in buildings, hopes to expand into new market segments in connection with infrastructure projects and fourth-generation wireless broadband.
The company decided to look for new opportunities after enjoying dramatic growth in profit in the first quarter of this year, and after reaching its financial targets last year despite a slowdown in the building-construction sector.
Arrow Syndicate posted Bt61.85 million in net profit for the first quarter, up 72 per cent from the same period last year, on revenue of Bt303.31 million, an increase of 25 per cent year on year.
“The main reasons for this growth were cost controls, especially as raw-material prices dropped by 20 per cent on average, thanks to the lower world oil prices,” said managing director Thanin Tanprawat.
He added that raw materials represented about 90 per cent of the company’s total costs.
Electrical-conduit work accounted for 67.33 per cent of its total revenue. Post-tensioned duct work accounted for 24.32 per cent, air-duct work 7.89 per cent and tap-water pipe work 0.45 per cent.
Arrow Syndicate also produces its own conduits and pipes, running at about 90 per cent of full capacity on average, said Thanin, adding that the company had increased the capacity every year.
“The construction sector has not seen a large slowdown, as the company can get contracts for electrical-conduit installation for many buildings in the retail and property sectors. So construction projects are still ongoing,” he said.
Even though fewer condominium projects have been launched, those that are completed need electrical conduits, air ducts and tap-water pipes installed, he noted.
In addition, the risk of a weakening baht resulting from expected capital outflows to the United State in the third quarter would not affect Arrow’s net profit, as it normally imports raw materials three months in advance.
He said the company this year planned to seek more jobs from state agencies, especially the underground electrical-conduit systems along many important roads in Bangkok as planned by the government.
Construction of the company’s Bt25-million factory for the epoxy-resin-fibreglass electrical conduits used for underground systems is expected to be completed this month.
Thanin said the company was committed to maintaining its gross margin at about 23-25 per cent and expected its revenue this year to grow by 20 per cent to Bt1.2 billion, which would be gradually realised by its current backlog of between Bt180 million and Bt200 million.
