Prime Steel Mill Co, a Thai steel producer, expects 2019 revenue to stay flat at 10 billion baht, saying global steel prices are suffering from the US-Sino trade war.
Thailand is set to be the next dumping ground for steel from China because that country cannot ship to the US because of higher tariffs, forcing Chinese exporters to find new markets.
Thai steel producers are finding it difficult to compete on price with dumped Chinese steel, said Win Suteerachai, chief executive of Prime Steel Mill.
"The steel price competition between local producers and overseas importers will pressure our revenue, although the country's steel market will be driven by five megaprojects in the Eastern Economic Corridor scheme and other construction projects across the country," he said. "We forecast local steel consumption totals at 17-18 million tonnes in 2019, a 5-8% rise, but many local producers are facing such high competition."
Founded in January 2014, Prime Steel Mill Co is a joint venture of AMC and The Steel to produce hot rolled steel at Amata City Industrial Estate in Rayong, employing 400.
The company's 56,000-square-metre plant has a capacity of 600,000 tonnes a year, utilising capacity to the tune of roughly 500,000 tonnes.
Prime Steel Mill has budgeted 200 million baht in 2019 to expand capacity and accommodate steel demand growth in the near future.
Mr Win said the company is diversifying into higher-value-added products because they have higher margins and can ensure stronger growth amid market competition.
In a related development, Prime Steel Mill has forged a joint venture with City Scape Co and Munkong Steel Co to develop and produce innovative property materials such as knocked-down houses under a new brand, Blox Living, focusing on younger buyers, startups and home offices.
Jin Ruamsuk, managing director of City Scape Co, said knocked-down houses will appeal to buyers with affordable prices and savings on cost and construction time.
Blox Living anticipates sales of 500 units in 2019, with prices of 150,000-200,000 baht from a size of 15 square metres.
For the first year, the venture expects revenue from knocked-down houses of 100 million baht.