Italthai confident in construction
Italthai Industrial Co, an importer and distributor of heavy machinery under Italthai Group, expects 30-40% revenue growth to 3.8-4 billion baht in 2018 as the number of construction projects rises.
Italthai Group is one of Thailand’s oldest trading and hospitality companies.
Italthai Industrial distributes many construction and industrial machinery brands, including Volvo, Tadano and some Chinese goods. The company provides after-sales service for those brands in Thailand and Laos at 14 branches.
Chief executive Adis Peukpattanaruks said many infrastructure projects will seek new contractors this year thanks to the government and private sector accelerating the expansion of mass transit systems and promoting urbanisation in provinces.
Mr Adis forecasts the l ocal heavy machinery market will be worth 25 billion baht in 2018, similar to the last two years, given corporate tax deductions during both years.
In 2016, the government offered corporate tax deductions of up to two times depreciation costs to local companies that invest in new machinery, equipment, furniture, computer software, commercial vehicles and buildings.
The measures were reintroduced in 2017 with a deduction of 1.5 times, which will end this June.
“We do not expect aggressive growth in the overall market in 2018 because the current value shows plenty of room for Italthai to grow,” said Mr Adis.
He said the company recently adjusted its business structure to clear up non-performing loans to 10% of customers.
Many retail small and medium-sized enterprises defaulted on their debt and Italthai took on a high financial burden to seize their machinery.
“Last year was tough for Italthai, bringing in a 12% decline in revenue to 2.9 billion baht,” said Mr Adis, though the situation has become stable.
The company plans to add two more branches in Thailand and one service branch in Laos.
Italthai also aims to beef up Volvo and Tadano sales, which represent nearly 70% of revenue.
Yesterday, it introduced the new Volvo EC200D, which is a heavy duty, fast-digging, high-production 20-tonne excavator, expecting 350 units to be sold in 2018.
More than 1.5 billion baht in revenue is expected from this new product, with a 10% market share in the 20-tonne category.
Italthai Group has set an aggressive revenue projection to double to 34 billion baht over the next five years with expansions overseas.
By that year, Italthai Industrial will contribute a significant chunk of about 8 billion baht or some 30-35% of the group’s projected revenue.
Mr Adis said Italthai Industrial will increase the number of service centres from 15 to 30 locations through 2019, covering Thailand, Laos and other Indochina countries, with an investment budget of 4 billion baht.