Tasco eyes steady sales next year
SET-listed Tipco Asphalt Plc (Tasco), Thailand's biggest asphalt producer, expects its 2022 sales to be on a par with those of this year, which are estimated at 1.25-1.3 million tonnes.
Chaiwat Srivalwat, chief executive of Tasco, said sales volumes will remain lower than the pre-pandemic sales of 2019, which stood at 2.26 million tonnes.
He said the prolonged trade sanctions imposed by the US on Venezuela have also caused Tasco to buy heavy crude oil from other countries which sold it at a higher price than Venezuela.
The sanctions restrict exports of heavy crude oil, a raw material for asphalt manufacture, from this Latin American country.
Tasco is planning to buy four cargoes of heavy crude oil from other suppliers for a whole-year usage. Each cargo carries 800,000 barrels of crude oil.
The company's crude oil inventory will last until the first quarter of next year.
"We have to change our purchase plan, though that will give us higher costs," said Mr Chaiwat.
The company is planning to sell more asphalt to road projects that need urgent repair, usually as a result of natural disasters, because the products can be sold at high prices.
The third quarter is usually a low season for road construction and repair projects in Thailand, but Tasco managed to maintain its business liquidity by selling asphalt to Cambodia, Vietnam and China, said Mr Chaiwat.
"Those countries will continue to build and repair roads until early next year," he said.
Tasco recorded total revenue of 6.86 billion baht in the third quarter of this year, consisting of 6.18 billion baht from the asphalt business and 679 million baht from the construction business.
Mr Chaiwat expects better sales in the domestic market during the fourth quarter due to more state budget spending in December.
Last year, Tasco acquired more shares in Thai Slurry Seal for 373 million baht, increasing its ownership from 25% to 62.5%, as part of its plan to synergise with construction companies.
Tasco hopes to benefit from value-added products and technology used by Thai Slurry Seal.
Thai Slurry Seal has been awarded a 5-billion-baht contract for the third runway development project at Suvarnabhumi airport.