EPG set to hit year’s revenue target after strong Q1

SET-listed Eastern Polymer Group Plc (EPG) says it is confident of reaching its revenue target of 10-11 billion baht this fiscal year starting April, up 15-25% from the previous year, after a healthy performance in the first quarter.

The company, which makes synthetic rubber and plastic, reported a revenue increase of 32% to 2.36 billion baht from April to June with net profit rising by 32.4% to 381 million.

President and chief executive Pawat Vitoorapakorn said of its three core businesses, thermal/cold insulation and plastics for auto parts saw a strong performance, while revenue from the third, food packaging under the EPP brand, fell slightly by 0.8% to 654 million baht because of flat consumption.

He said while the country’s automotive market remains bearish, plastics for its auto parts unit under the Aeroklas brand had shown strong growth thanks to orders abroad.

Aeroklas products include bed liners, canopies, deck covers, side steps and other accessories for pickup trucks.

“Car output in 2016 is expected to grow from 1.91 to 2 million vehicles, of which 60% will be pickup trucks,” said Mr Pawat.

EPG acquired an Australian pickup truck accessories producer, TJM, in 2015. The deal, intended to strengthen its automotive-related business, was worth 580 million baht.

“The company can expand its business via TJM’s customer bases in Australia, Thailand and other countries,” he said. “I plan to localise TJM manufacturing at EPG’s facility in Rayong in the future and close existing TJM operations in China.”

Mr Pawat said EPG had earmarked 2 billion baht for its two-year business plan until fiscal year 2017, ending in March 2018.

One billion baht will be spent on research and development for its three core businesses, while another billion will be allocated for mergers and acquisitions (M&A).

Mr Pawat said EPG is considering the acquisition of more companies and already has its eyes on two firms — one in the US, the other in Malaysia.

He said its M&A strategy aims to raise overseas revenue to account for 70% of the total by 2017, up from 62% at present.

EPG shares closed yesterday on the Stock Exchange of Thailand at 14 baht, unchanged, in trade valued at 759 million baht.