Singburi, Thailand, September 19, 2006--Singha Paratech Plc, the wooden flooring producer, is investing 250 million baht to increase production capacity to serve rising overseas demand, according to chief executive Somchit Bowseriwong.
"Due to the rapidly rising demand, our production is now operating at nearly full capacity. We need to expand capacity to maintain revenue growth," he said yesterday.
The investment would raise the company's capacity to 2.2 million square metres a year from 1.5 million at present.
If shareholders approve the investment in mid-October, the expansion process will begin in January. The investment will be financed by bank loans and operating cashflow.
Somchit said, however, that the company planned to maintain its debt-to-equity ratio at no higher than 1.25 times, compared with 1:1 currently.
Singha Paratech yesterday signed an agreement with the Siam Cement Group (SCC) to distribute its Singha Parket flooring through SCC's Cementhai Homemart retail chain.
"The domestic market is now more interesting as homeowners are beginning to accept other materials to replace genuine wood because it is comparable and convenient for builders and owners," said Somchit.
Initially the company expects sales of at least 40,000 square metres per month from 20 Cementhai Homemart outlets.
As well, he said, domestic sales offered higher margins as transport and insurance costs were significantly lower than those of exports.
As a result, the company plans to raise the portion of domestic sales volume to 30% of its total sales, compared with 20% currently.
The company is negotiating with the new clients in Australia and the Middle East to expand its export market. Its existing overseas markets include Europe, Asia and North America.
