BKS sees lacklustre future sales
Bangkok Komatsu Sales Co (BKS) is downbeat on local sales of construction machinery in fiscal 2018 ending in March, even as Thailand accelerated many megaprojects that are driving momentum in the sector.
BKS distributes excavators, wheel loaders, bulldozers, motor graders and dump trucks under Japan's Komatsu brand.
BKS expects to sell 800 units in fiscal 2018, a downgrade from the previous target of 850 units.
With this sales volume, BKS aims for value of 3.2 billion baht in 2018, down by 20% from a year before.
Pranitan Phornprapha, president and chief executive, said the construction machinery market has been highly competitive, with many brands entering Thailand since widespread flooding in 2011.
In 2012, the new construction machinery market peaked at 5,100 units sold, while market value for the period stood at 22.8 billion baht.
BKS also recorded a high for sales at 1,120 units in fiscal 2012, up by 40%, with value for the period totalling 4.5 billion baht, up by 45%.
"Following 2012, the local market has been declining, and BKS' sales also dipped," said Mr Pranitan.
"In the fiscal 2018, 2,970 units are expected to be sold, down by 17.5%, at a value of 12 billion baht, down by 17%."
He said the downturn in the local construction machinery market has not been worrisome for BKS because the market is mature and steady.
"Once the market picks up, there will be single-digit growth," said Mr Pranitan.
"In addition, BKS is also looking for new business opportunities from the government's Eastern Economic Corridor scheme, which has many megaprojects to beef up demand for construction machinery."
He said if the general election proceeds without trouble, the construction sector is expected to gain positive momentum under the next administration.
Mr Pranitan forecasts the construction machinery market will grow to 13.5 billion baht in fiscal 2019, which starts in April for the company.
Founded in 1956, BKS is a joint venture firm between Siam Motors Group, owned by the Phornprapha family, and Tokyo-based Komatsu.
Both parties have a manufacturing venture at Chon Buri's Amata City Industrial Estate through Bangkok Komatsu Co.
The plant has a production capacity of 9,000 to 10,000 units for Komatsu's construction, industrial and agricultural machinery.
Some 85% of the output serves 20 countries across Asia-Pacific.