Solimac Group, Thailand’s main sandpaper distributor, expects to double its revenue to 2 billion baht within five years and become the top sandpaper exporter in Southeast Asia.
Managing director Pravee Kruachottikul said the company expects its revenue will rise by only 15-20% this year from 30% in recent years, as the political turmoil has further hurt the lacklustre economy.
Solimac has three main businesses: trading in the furniture and automotive industries; sandpaper and engineering products and woodworking machinery; and technology or know-how services that replace human resources.
Of its revenue of 1 billion baht last year, 60% came from the sandpaper business, 25% from machine trading and 15% from technology services.
Sandpaper and machine trading have a gross profit margin of 10-30%, while technology services have a higher margin of 30-50%.
Solimac dominates the domestic sandpaper market with a market share of 60-70%. It also has distribution units in Myanmar, Malaysia and the Philippines and is setting up a new unit in Vietnam.
Sandpaper business opportunities will increase after the launch of the Asean Economic Community (AEC) late next year, Mr Pravee said.
The Myanmar market is expected to grow rapidly due to soaring demand for sandpaper for the wood industry, while demand in Vietnam and the Philippines will also be solid.
Solimac targets its export revenue to double to 200 million baht this year.
Mr Pravee believes the sandpaper market in Southeast Asia will experience strong growth of at least 50% each year over the next three years, while the domestic market is projected to increase 20-30% per year.
With the rosy investment outlook prompted by the advent of the AEC, the company plans to raise its production capacity.
"We're planning to use the Market for Alternative Investment as a funding source for our business expansion by seeking listing there in the next two years," Mr Pravee said.
Solimac has paid-up capital of 280 million baht and plans to raise up to 300 million.
Mr Pravee said his family's shareholding in the company will stand at 60-70% following the initial public offering.
Solimac needs 100 million baht in fresh funds for new distribution units in foreign markets.