EPG allots B500m for growth plan

Eastern Polymer Group Plc (EPG), a SETlisted company and Thailand’s leading plastic moulder, has allotted a budget of 500 million baht for improving production costs and product quality.

Deputy chief executive Challeo Vitoorapakorn said it is the second year in a row the company has apportioned funds to improve its cost efficiency. Last year it allocated 390 million baht, mainly used for its food and beverage packaging production improvement programme.

It aims to maintain a gross profit margin at not less than 32% of total sales.

“Our move is to ensure greater competitiveness than our rivals so when the market heats up, we will be ready to battle it out in terms of cost,” said Mr Challeo.

The company has focused on energy saving measures for the overall production process and improving its production line to reduce the defect rate and attendant waste.

Around 100 million baht will be spent on advancing automation technology to be installed for Aeroflex production to shorten the manufacturing time and boost quality.

Its core product, Aeroflex, is thermal insulation used in the construction sector.

Mr Challeo said that while Aeroflex demand had slowed over the past several years, this year it forecasts the construction sector will be lifted by a raft of new projects.

The remaining 400 million baht will go to further upgrading production in Thailand and Australia of its Aeroklas auto parts and accessories.

“Our production facility in Thailand used to produce car seat canopies at a maximum capacity of 18,000 units. But once we improve the production process, our capacity will nearly double to 30,000 units,” said Mr Challeo.

The three core revenue drivers of the company comprise auto parts and accessories, building materials and food and beverage packaging.

All three businesses have faced stiff competition over the past several years, he said, adding that this year was showing solid signs of a global economic recovery.

Mr Challeo said EPG has set its average annual sales growth target over the next three years at 15%, up from only one digit during the global economic crisis.

EPG shares closed yesterday on the Stock Exchange of Thailand at 13.10 baht, up 30 satang, in trade worth 90.5 million baht.