Srithai to miss revenue target by 4%
SET-listed Srithai Superware Plc, the world's biggest maker of melamine tableware, expects full-year revenue to fall below its 10-billion-baht target as the gloomy outlook for the global economy cuts demand.
President and chief executive Sanan Angubolkul said he expected revenue would reach 9.6 billion baht -- 4% below target.
With expected falls in revenue this year, the company plans to slow new investment in 2017, the first such slowdown in five years, as a weak economy and weak demand have adversely affected business.
But it still targets 4-5% revenue growth to 10 billion baht next year, as both the Thai and global economies are expected to improve, he said.
"The company has spent around 1 billion baht each year over the past five years on investment. But we will reduce our investment budget to around 500 million baht in 2017, which will mostly be used for maintenance. We have to be cautious and not spend too much in the coming year," said Mr Sanan.
He said Srithai is also seeking a new partner via a merger or acquisition abroad to expand its customer base.
The company has three core businesses of plastics, trading and mould making. Its products are sold in many countries under several names such as Ektra, Flowerware, Melamineware, Superware, Unica and Vanda.
Mr Sanan said Srithai had also slowed its 190-million-baht investment in India, which had just started over the past several years, because of rising operational costs, prompting it to seek cost-cutting measures.
"Earlier we aimed to set up new melamine factories in several states of India," he said. "But after we launched the first factory, we found costs were rising so we need to try to control that first."
For the company's overseas business, it also built a melamine factory in Vietnam in 1994. That factory expanded its capacity and started producing plastic packaging in 2013.
Srithai reported total revenue of 6.9 billion baht in the third quarter this year, down from 9.9 billion in the same period last year. Net profit in the third quarter fell to 59.3 million baht from 100 million in the same period last year.
SITHAI shares closed yesterday on the Stock Exchange of Thailand at 1.78 baht, unchanged, in light trade worth 740,330 baht.