Millcon to upgrade steel capacity to serve demand

SET-listed steel producer Millcon Steel Plc is planning to increase its production capacity to 800,000 tonnes per year combined at its two plants in Bangkok and Rayong provinces to serve both domestic and export demand.

Combined capacity at Millcon’s two facilities is 600,000 tonnes per year, with the Bangkok plant producing 250,000 tonnes and the Rayong plant 350,000 tonnes.

Pravit Horungruang, acting chief executive and president, said Millcon is preparing a budget for the new capacity, expecting to spend from next year.

“The new capacity upgrades should be complete in the next couple of years,” he said.

At home, new megaprojects, particularly in the government’s flagship Eastern Economic Corridor (EEC) scheme, are set to beef up steel demand. The EEC is expected to attract new investment flows to the construction sector.

Millcon also plans to increase the production capacity for steel bar and premium steel products. Steel bar is to serve the construction sector, while premium steel products supply the country’s automotive sector.

Thailand consumes roughly 3 million tonnes of steel bar per year.

Mr Pravit said Millcon is in talks with the Myanmar government about new investment for a steel factory in Myingyan, in Mandalay.

In 2016, Millcon teamed up with two Myanmar companies to invest in a US$12-million (397 million baht) plant to produce steel products for construction to meet rising demand there.

Millcon owns a 45% stake in this joint venture, Millcon Thiha Co, while General Engineering Co holds another 45% stake, and Thiha Group 10%.

The plant is located in Myanmar’s Thilawa special economic zone, with privileges including a 75-year land lease and import and export tariff exemptions.

The plant produces 4,000-5,000 tonnes per month, serving Myanmar.

“Myanmar has rapid growth in its economy and construction sector, so current capacity is insufficient for that market,” he said.

For exports, Millcon aims to expand to new overseas markets, focusing on Asean, Europe and Oceania. It expects to increase export sales from 10% of its revenue to 15% in 3-5 years.

“We plan to export steel billets to Indonesia, the Philippines and Vietnam, where the construction sectors have a lot of potential,” said Mr Pravit.