Thai manufacturer Northeast Rubber (NER) plans to spend 495.6 million baht from 2019-20, budgeted partially from its IPO, as it aims to expand its production capacity in Buri Ram province.
The production facility is located in Prakhon Chai district, making three products: standard Thai rubber (STR), mixed rubber and ribbed smoked sheet (RSS).
Chuwit Jungtanasomboon, chief executive of NER, said 455.6 million baht will go towards a second factory in the same location on 71.28 rai.
"This factory will make STR and mixed rubber at a capacity of 172,800 tonnes per year," he said. "As the first factory has had a utilisation rate of 90% since last year, the company decided to build a second one."
The new factory will start construction either this quarter or early 2019, expecting to take 16 months for completion.
The remaining 40 million baht will be set aside for new machinery in the first factory to increase the capacity of RSS by another 60,000 tonnes per year.
Chuwit: Bridgestone is a huge customer
Founded in 2006, NER plans to float 600 million shares on the Stock Exchange of Thailand, representing 38.96% of the total 1.54 billion shares after the IPO.
Of the total, the Jungtanasomboon family hold 940 million shares, representing 61.04%.
Yesterday, NER announced the IPO price at 2.58 baht per share.
The IPO will be held on Oct 29-31 and shares of NER will be traded on the SET in November.
Capital Nomura Securities was appointed as lead underwriter for the IPO, together with seven financial companies. Asset Pro Management is NER's financial adviser.
Mr Chuwit said NER has a major customer in Bridgestone, the largest tyre manufacturer and distributor in Thailand.
NER has overseas dealers in China, Singapore and Malaysia.
Domestic revenue represents 60% of the total, with the rest from exports.
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