SET-listed Thai Vegetable Oil Plc (TVO), the producer of A-ngoon soybean cooking oil, is considering building two factories, one in Thailand and another in another Asean country, to help support its future growth.
Chairman Visuth Vitayathanagorn said the company is conducting a feasibility study to set up a fourth factory in Thailand as its three factories in Nakhon Pathom are working at full capacity.
Currently, TVO uses about 6,000 tonnes of soybean seeds a day to produce cooking oil.
The company also plans to set up a soybean cooking oil factory in another Asean country in the near future. Myanmar is among potential countries because the consumption of vegetable cooking oil there is larger than in Thailand, while the livestock industry, which requires soybean feed, is picking up.
Visuth: Expansion to serve future growth
TVO will conclude its investment plan for the new factories by the end of this year. The company estimates the fourth factory in Thailand will require at least 1 billion baht to set up.
"It will be the biggest investment for TVO in its 50-year history, supporting our future growth both locally and in the Asean market," said Mr Visuth.
The vegetable cooking oil industry grew by 3-4% to 22.8 billion baht last year, of which 66% was derived from palm cooking oil, 28% from soybean cooking oil and the rest from others. It is forecast that the vegetable cooking oil market will rise by 4% to 23.7 billion baht this year.
Last year, TVO's sales grew by 3-4% to 27.9 billion baht with a 45% rise in its net profit to 2.74 billion. Of the total, about 65% of sales came from soybean feed and the rest from cooking oil.
"Our 2016 sales and net profit broke all previous records," he said.
Mr Visuth said the growth in sales and net profit in 2016 came from many factors. The wake of El Nino in Malaysia, Indonesia and Thailand damaged last year's palm oil crops, resulting in the higher palm oil prices, making soybean oil a viable alternative.
The company expects its sales to grow by 3-4% this year, backed by a product line extension into corn and sunflower oil under its A-Ngoon brand as well as the distribution of imported olive oil under the Monini brand.
TVO shares closed yesterday on the Stock Exchange of Thailand at 34.50 baht, up 50 satang, in trade worth 55.8 million baht.