TPI Polene PCL, Thailand’s number three cement maker, said on Tuesday it expects 2004 revenues to rise 15.8 per cent due to higher sales of cement and plastic pellets. The company also forecast 2005 sales growth of at least 10 per cent as domestic demand for cement remained strong, senior vice president Prasert Ittimakin told reporters. "Our revenues will be about 22 billion baht this year from about 19 billion baht last year," Prasert said, referring to 2005 revenues of the equivalent of $563m. Reuters Estimates forecast revenues of 20.6 billion baht in 2004 and 22.2 billion baht revenues in 2005. TPIP also planned to wipe out 2.3 billion baht of retained losses in the fourth quarter, when operating profit would be higher than in the third quarter, Prasert said.
TPI Polene, 49 per cent owned by Thai Petrochemical Industry, Thailand’s biggest corporate debtor, is seeking creditor approval to increase its annual capacity by 3.3Mt from 9.9Mt now, he said. TPIP planned to spend about 6 billion baht to expand capacity, partly using cash from its operations, Prasert said. Domestic cement demand is expected to grow 8-10 percent annually over the next few years as the government spends several billion baht on building roads and railways in Bangkok and nearby areas, analysts say. TPIP’s bigger rivals, Siam Cement PCL and Siam City Cement PCL announced plans to expand capacity earlier this year.
To reduce its interest burden, TPIP was also considering seeking new loans to refinance debt. The company’s interest costs now averaged 4.9 percent of debt, he said. TPIP planned to repay US$72m of principal in 2005, which would help reduce its debt from 28.3 billion baht (US$724.5m) at the end of September. Last month, a Thai court gave final approval to the company’s revised debt plan, allowing TPIP to change the terms of debt payments and more time to restructure debts. Creditors include Thailand’s biggest commercial bank, Bangkok Bank PCL, Krung Thai Bank and German development bank Kreditanstalt fuer Wideraufbau.