TPBI prepares to ride rise in HVA product demand
TPBI, a producer of environmentally friendly plastic packaging listed on the Stock Exchange of Thailand, aims to double its high-value-added (HVA) product portfolio within the next three to five years.
This is aimed at catering to the demand for soft-plastic containers and multi-layer blown film, such as laminated films and barrier films, from the producers of fresh and frozen foods and ready-to-eat meals.
TPBI earned a net profit of Bt191 million in the first half of this year thanks to strong demand for plastic, trash bags and soft-plastic containers, chief financial officer Kamol Borrisuttanakul said.
TPBI plans to invest Bt800 million to double production capacity of soft-plastic containers for consumer goods, or by another 100 million metres a year on 17 rai (43 acres) of land in Sampran district, Nakhon Pathom province, to support the projected increase in demand over the next four to five years.
Construction is expected to begin this year and should be completed by next year.
Demand for HVA products is projected to grow by an average of 10-20 per cent a year. This type of product currently accounts for 18-20 per cent of total sales, and is expected to rise in the next few years, Kamol said.
In the first half of 2016, revenue was Bt2.34 billion, up by 6.9 per cent over the Bt2.19 billion in the same period of last year. Net profit was Bt191 million, an increase of 4.6 per cent year on year. Second-quarter revenue and net profit were Bt1.16 billion and Bt94 million respectively.
For the second half of this year, the company has 18.9 per cent more orders from its core clients for soft-plastic containers, which boosted this product’s share in the company’s total revenue to 14 per cent. Meanwhile, orders for the company’s traditionally main product – plastic trash bags – grew by 9.2 per cent from the same period of last year, Kamol added.
Even though the global economy continues to be sluggish, the company is striving to lower the cost of production through the use of compound plastic pellets and product-mix adjustment to include more high-value-added products.
This helped keep TPBI’s profit margin healthy enough to ensure sustainable business growth, Kamol said.
