Italthai Group, one of Thailand's oldest construction and hospitality companies, sees a positive outlook for domestic construction despite the pandemic, thanks to spending worth 60-70 billion baht from the annual state budget on infrastructure projects.
The construction sector, together with heavy machinery, is benefiting from new road construction and repair, reservoir projects as well as state investment in the heavily-promoted Eastern Economic Corridor (EEC) scheme, a new high-tech industrial hub for the country.
The government has allocated 60-70 billion baht a year via infrastructure development to the provinces as part of its efforts to boost local economies, according to Italthai Group chief executive Yuthachai Charanachitta.
Italthai expects this year's sales of overall heavy machinery, which is required for construction work, will increase to 5,000 units in the domestic market, up from 4,000 units last year.
"The Thai heavy machinery market has seen its highest growth for two consecutive years because the government sped up the spending of its budget," said Mr Yuthachai.
The company expects higher sales of its heavy machinery this year, setting a target of 400 units, up from 250 units in 2020.
However, the company remains cautious about strong competition in the heavy machinery market because China has dumped cheaper equipment into the market. Chinese exporters now command around 30% of the market share.
Italthai Group is expecting its total revenue to rise by 35% year-on-year to 13.5 billion baht in 2021. Up to 65% of revenue will be contributed by Italthai Industrial Co, which sells heavy machinery, and Italthai Engineering Co while 35% will come from its hospitality and lifestyle businesses.
The group currently has a backlog, valued at around 4 billion baht, in the machinery segment and it expects this revenue to be gradually recognised this year, said Mr Yuthachai, referring to business projects the group had already signed contracts for.
"Italthai also plans to invest in four-megawatt rooftop solar panel project in Thailand, worth 200 million baht, and will diversify into renewable energy through Italthai Engineering," said Mr Yuthachai.