Push abroad shores up materials producers

“We will expand our export market by focusing on the Cambodian market, which has continued to see strong demand for construction raw materials,” Bangkok Dec-Con’s managing director Nuchanart Rattanasuwannachart said.
She said the company is maintaining its view for business growth of up to 20 per cent for this year after the company reported revenue of Bt316.54 million in the first quarter of this year. The take was 15 per cent higher than the Bt275.5 million logged in the first quarter of last year. Net profit of Bt75.9 million in the first quarter represented a jump of 293 per cent from the Bt16.39 million booked in the same period last year.
Nuchanart said that the company has projects worth Bt1.3 billion under way, with the income to be booked this year and the next.
The company also plans to join in the bidding for projects worth up to Bt5 billion this year. Successful bids will help maintain the business growth and the company’s Cambodian contracts will also be a strong contributor to revenue this year.
 Another player in the sector, Diamond Building Products, is also sharpening its focus on the markets of neighbouring countries.
Managing director Satid Sudbuntad said the company also experienced a drop in overall domestic demand for construction raw materials in the first quarter of this year, from the year-earlier period.
This prompted Diamond Building Products’ intensified push into Cambodia, Laos, Myanmar and Vietnam. “We target boosting our export value to 20 per cent of total revenue in 2018 from currently 17 per cent,” Satid said.
For the first quarter, most producers of construction raw materials that are listed on the stock exchange reported lower earnings than the year before. Dynasty Ceramic reported net profit of Bt346.22 million in the first quarter, sliding 21 per cent from the same period last year. Quality Construction Products announced a net loss Bt11.34 million for the quarter.
Faring even worse was Royal Ceramic Industry, with a net loss of Bt177.5 million in the quarter, against a net profit Bt3.69 million in the first quarter of 2016. Thai-German Ceramic Industry reported net profit of Bt38.38 million, down 33 per cent from the first quarter of last year.
Maybank Kim Eng Securities (Thailand) research shows that demand for cement in the first quarter of this year dropped 7 per cent from the same period last year, against a backdrop of a slower pace of construction of residential and commercial buildings.
The second quarter has remained sluggish, with the government's infrastructure proposals still under the bidding process.
Maybank Kim Eng believes demand for construction raw materials will begin rising in the second half of this year when construction starts on some of the government's infrastructure projects. This will drive the overall market for construction raw material producers.
The brokerage’s research says those construction raw material firms that have expended into neighouring countries will benefit from those countries’ plans to develop their infrastructure.