Compact abandons planned Dawei plant

Compact abandons planned Dawei plant

Expansion sought at Phetchaburi facility

Vehicle-brake maker Compact International (1994) has scrapped plans for a factory in Dawei, Myanmar and shifted focus to its domestic operation.

Managing director Kasem Issaraphithakkul said the company saw it was not worth investing in Dawei since the infrastructure was not yet ready to support its business development.

The company declared in 2012 that it would build a plant in Dawei at a cost of 100 million baht over the next two years. It would initially produce brake pads for motorcycles and trucks for the Myanmar market and for export to Bangladesh, Sri Lanka and Pakistan. Mr Kasem said Compact would spend about 100 million baht this year to construct a second phase for its facility in Khao Yoi, Phetchaburi. The company acquired a 33-rai plot there for a 3,500-square-metre plant.

Brake pad production capacity is slated to increase by 25% or 40,000 sets per month in 2016 from 160,000.

Compact is applying for Board of Investment privileges as it needs to import new machinery.

"The new phase will also have a maximum capacity of 160,000 sets per month, but Compact will proceed step by step with its cash flow until 2020," he said.

Mr Kasem said the company has also postponed its listing for an indefinite period, as shareholders are not unanimous on the listing plan.

Compact said in 2012 it planned to list on the Market for Alternative Investment to raise funds for its future expansion.

Founded in 1976, Compact has two facilities in Samut Sakhon and Phetchaburi.

It produces disc brake pads, brake linings (30,000 sets per month) and brake shoes (60,000 sets per month), focusing on the replacement market. Compact's products are made without organic asbestos.

Compact has 2,000 distributors nationwide and the company provides products to service centres of five auto makers. 

Mr Kasem expects sales to grow by 6% to 800 million baht this year. The domestic market accounts for 70%, with the rest for export to more than 30 countries.

Compact's business has been affected by the economy, especially brake products for commercial vehicles, because many megaprojects have been delayed and farm product prices remain low. 

For passenger vehicles, brake demand remains tepid.

Compact's long-term target is to achieve total sales of 1.3 billion baht by 2020.

Do you like the content of this article?
COMMENT