State infrastructure investments and a Thai-Chinese high-speed train project, which will fuel domestic demand for steel, is causing Tata Steel Thailand (TSTH), a business unit of India's largest steel maker to shift its focus towards local market sales rather than export.
Tata Steel Thailand chief executive Rajiv Mangal expects higher steel demand in Thailand this year. Tata Steel Thailand
New road constructions and road repair projects in many provinces will be among key revenue boosters for TSTH.
"Last year, steel consumption in Thailand reached 16.48 million tonnes and this year we are seeing positive signs that will drive steel demand," said TSTH chief executive Rajiv Mangal.
The company earlier expected state infrastructure projects to cause steel consumption to grow up to 18-18.5 million tonnes in 2021.
Between January and February, demand for steel increased by 6% from the same period last year.
TSTH is focusing on domestic sales as export markets are uncertain due to lockdown measures still in place.
"It's difficult to export steel from Thailand to other countries and overseas demand has also dropped due to the pandemic," said Mr Mangal.
Chaichalerm Bunyanuwat, TSTH vice-president for marketing and sales, expects the Thai-Sino high-speed train project to require around 500,000-600,000 tonnes of steel, including premium rebar steel.
The government is building a rail track linking Bangkok and Nakhon Ratchasima, which is part of a larger rail network connecting Thailand, Laos and southern China.
Mr Mangal said the company has no plan to increase steel production capacity because it currently has enough capacity at 1.7 million tonnes a year.
TSTH plans to spend a budget of around 250-300 million baht during 2022 fiscal year (April 2021-March 2022) to improve steel quality and increase production efficiency.
In fiscal year 2022, Tata steel expects to sell over 1.3 million tonnes of steel.
Its total revenue in 2021 fiscal year (April 2020-March 2021) increased by 9.4% to 22.01 billion baht year-on-year. The steel sales volume increased by 8.49% year-on-year to 1.30 million tonnes.