Srithai restructures in drive for growth
Melamine maker splits business into three
SET-listed Srithai Superware Plc, the world's largest melamine manufacturer, is restructuring its organisation for first time after 53 years of establishment in a bid to drive growth next year.
Sanan Angubolkul, chairman and president, said it will spin off its operation into three business units: melamine, plastic injection and trading. Srithai itself will act as a holding company.
The move is to allow each business unit to reach its potential, with a clear evaluation of its performance.
"The nature of three business units is different, " he said. The company also wants a new generation of younger staff to manage the business that suits them.
Srithai will continue to spend 500 million baht to expand its melamine business and buy new machines for packaging and containers business at its factories in Thailand and Vietnam.
"We will slow down our investment next year as orders for food and beverage packaging products have dropped after buyers in the European market ban shrimp and chicken from Thailand," he said. The company hopes the ban will be lifted next year.
Nonetheless, the company sees the decline being offset by rising demand in European countries that prohibit the use of glass products in catering and outdoor activities due to safety concerns. The company expects its sales in Europe to double over the next five years.
Srithai is more optimistic about the US market. Donald Trump as president is set to make a trading policy that is tough for China, a move that would benefit Srithai's melamine business.
"We expect to sell more melamine products to the US next year. Big customers who regularly buy melamine products from China have already shifted their orders to Srithai," he said.
Labour cost in China is also on a rise, raising the prices of the Chinese products.
Srithai is hopeful that sales in the US, worth 100 million baht a year, will double in the near future.
Currently, 20% of export sales comes from the Middle East, 10% from Europe and the rest from other countries.
Mr Sanan said plan to list its Vietnamese company on the stock market in Vietnam is delayed because it does not need more fund and has low debt. The new plastic plant in Hanoi will start operation next year.
Srithai expects its sale in 2017 will exceed 10 billion baht, up from 9.5 billion baht expected this year.
SITHAI shares closed on the SET on Friday at 1.78 baht, unchanged, in trade worth 1.88 million baht.