AGC Flat Glass (Thailand) Plc (AGC), the country's largest glass maker, foresees a 10% drop in revenue this year following the closure of one of its plants to pave way for a 2.4-billion-baht factory with upgraded technology.
Its plant in Rayong province, which produces glass for the electronic parts industry, was demolished late last month.
It will be replaced by a new factory with upgraded equipment to keep up with technological developments in the electronics sector, said senior executive director Pairatpong Methaiwala.
Formerly known as Thai-Asahi Glass Plc, the company has another two factories in Samut Prakan and Chon Buri.
Its products serve largest local glass users including those in the electronics parts, construction materials and automotive industries.
Currently, 40% each of the company's products are sold to the construction and electronics sectors while the remaining 20% supply the automotive sector.
AGC claims it controls almost half of the overall glass market of 600,000 tonnes per year.
It has a production capacity of 500 tonnes of glass per day per furnace.
Mr Pairatpong said revenue will drop by not more than 10% from last year's 7.5 billion baht, due to a six-month closure of its Rayong plant.
"This will also mean that our exports will fall proportionately, as the Rayong plant produces entirely for exports to electronic parts makers in Asia," said Mr Pairatpong.
Exports make up 35-50% of total annual output.
Mr Pairatpong said one of the threats faced by AGC is the strong baht, which makes cheaper glass imports, especially from China, more competitive with its products.
Thais use 7-8 kilogrammes of glass per person per year. Around 20% of the country's total usage is imported.
The local glass market normally outpaces the country's gross domestic product (GDP) growth by 2-3 percentage points, said Mr Pairatpong.
"Apart from possible lower glass sales to the automotive sector due to potential non-payments by some first-time car buyers, our main challenge this year is the baht appreciation. But we're more relieved now that it is 31 baht to the dollar," said Mr Pairatpong.
Although Chinese-made glass is 10-20% cheaper, AGC's attempt to produce value-added products has helped lower the risk to some extent, said marketing manager Songpol Bumpensanti.
Mr Songpol said the company is also focusing on energy-conservation glass for the construction sector, the type supported by Energy Ministry policies.
AGC spent nearly 50 million baht to research and develop a glass coating technology to prevent heat from entering buildings.
AGC president Hideki Shioi said Thailand is the company's largest investment base in Asia.
It also has factories in China, Indonesia, the Philippines and Japan, as well as Europe and the United States.