SET-listed Tata Steel Thailand Plc (TSTH), the Thai unit of India's largest steelmaker, expects Thai steel demand to grow by 5-8% this year to 18 million tonnes thanks to the government accelerating infrastructure projects.
Rajiv Mangal, the chief executive, said the company believes the government is keen on pushing forward construction megaprojects, which should raise steel demand.
"The country's outlook in 2018 has many positive signs for private sector and railway projects, in particular high-speed and double-track schemes that should boost steel consumption," he said.
The company forecasts the government's flagship scheme, the Eastern Economic Corridor project, will attract actual investment flow from the private sector from the second half in 2018 onward.
Mr Mangal expects the sales volume of steel from Tata will stay around 1.24-1.25 million tonnes in this fiscal year, starting April 2018 to March 2019.
Moreover, it plans to increase its steel exports to overseas countries such in Asean as well as India and China after witnessing demand growing in these markets.
Tata is increasing its production capacity of cut-and-bend steel to serve demand growth, spending 75-85 million baht to upgrade machinery.
It produces 10,000-13,000 tonnes a month of cut-and-bend steel and wants to add another 3,000-3,500 tonnes a month to serve the infrastructure and construction projects.
In a related development, Tata reported it has sold machinery assets for the mini-blast furnace steel project to the Indian steelmaker Srijan Steel and Power Industries worth US$15.15 million (476 million baht) in November 2017.
The mini-blast furnace steel plant started operating in 2007 with a production capacity of 500,000 tonnes a year, then the company shut the plant down in 2011. Tata invested on this facility of 4-5 billion baht.
Tata has a production capacity of 1.7 million tonnes a year from three plants in Thailand, but it utilises only 1.4 million tonnes.
Tata had the sale volume during April to December last year at 918,000 tonnes, down by 1.85% year-on-year because many mega projects have yet been implemented while the private sector is waiting the positive sign from the government.
In 2017, the steel demand dropped by 5-6% to 17.8 million tonnes.
But its net sales in the same period rose by 16% to 13 billion baht thanks to Tata focusing more on high value-added (HVA) products such as cut-and-bend steel.
Mr Mangal added that HVA products have high margins and serve customer demand directly because the products are ready to use.
Tata expects to increase HVA production by 22-25% in 2018.
