Eastern Polymer Group Plc (EPG), a SET-listed company and Thailand's leading plastic moulder, has committed to a three-year investment plan until 2020 with a budget of 1.15 billion baht, saying all projects are on schedule.
Chalieo Vitoorapakorn, deputy chief executive for business development and investment, said EPG plans to expand its production capacity using a budget of 650 million baht, with the remaining 500 million allocated for future asset acquisition.
For the capacity expansion, Mr Chalieo said EPG will focus on a range of plastic products such as insulation and accessories building materials, automotive parts and accessories, and disposable plastic packaging for food.
"We have seen potential growth in overseas markets while the domestic one gradually bottoms out," he said.
Mr Chalieo said EPG has started development of its production facility for building materials in Rayong province, increasing capacity from 24,000 to 30,000 tonnes per year. It is expected to begin operation by mid-2019, he said.
Building materials represents 28% of EPG's total revenue, with the segment receiving a warm welcome from buyers in China, Japan, the US and Thailand because of the quality and innovation, said Mr Chalieo.
"Sales in this product segment grow by double digits annually," he said.
For the auto parts segment, EPG is increasing the production capacity of truck windows with safety glass at a cost of 100 million baht.
The automotive segment controlled half of the company's revenue in the first half of 2018.
Mr Chalieo said the automotive segment has strong potential in the coming year and EPG has already made a massive investment in it the last three years to prepare for growth in the market.
Regarding asset acquisition, EPG acquired Australia-based TJM Product Pty, a sport utility vehicle accessories maker, for 566 million baht in 2015.
Then in 2017, it acquired another Australian firm -- Flexiglass Challenge Pty from Fleetwood Corporation -- for 176 million baht.
"These two acquisitions happened at the right place and time, when the global economy was on the rebound. Both companies have such high potential for growth via EPG as well as possessing good distribution channels in many countries," he said.
Mr Chalieo was mum on future asset acquisition deals.
EPG has allocated an additional budget of 300 million baht for plastic and film for food-grade products, expanding production capacity for a clean room processing plant to tap into a greater market in Thailand.
This expansion plan is designed to utilise either new investment or asset acquisition, he said.
"Though the new deal comes at a higher cost than EPG expected, we have financial capability of 5.5 billion baht to support the plan, gained from accumulated net profit and capital," said Mr Chalieo.
Moreover, EPG plans to operate its business units using innovation-based products, he said. For example, it owns nearly 100 patents and about 100 new ones are pending registration to receive approval.
The group plans to inject 110-120 million baht into the current fiscal year budget, ending in March 2019, equivalent to 1.2% of total revenue, for new R&D, said Mr Chalieo.
