Chang International Circuit in Buri Ram province, Thailand’s first world-class racing circuit, had its track laid by Tipco Asphalt Group, which wants to expand its business into the large markets of Vietnam and Indonesia. THANARAK KHUNTON
SET-listed Tipco Asphalt Plc (TASCO), the country’s biggest asphalt maker, has acquired stakes in two subsidiaries of France’s Colas Group in a bid to increase its production capacity and sales to become a top supplier of asphalt in Asia-Pacific.
Managing director Chaiwat Srivalwat said the company paid 2.2 billion baht for stakes in Colas SA in Vietnam and Colas SA in Indonesia.
Demand for asphalt in those countries is expected to grow substantially, in line with road expansion and construction.
Colas Group is the world’s biggest road construction company and a major supplier of blended bituminous products for road surfacing, with operations in 45 countries and 42,000 employees worldwide.
“Tasco wants to expand its business in Vietnam and Indonesia, which are large markets with strong potential to grow, since there are not many players at a time when these economies are growing and demand is rising,” Mr Chaiwat said.
He said Tasco had started negotiating with Colas in Indonesia and Vietnam early this year after the French group decided to restructure its business and was interested in selling shares.
However, Mr Chaiwat declined to say how much of a stake in either subsidiary Tasco had bought.
With the expansion, Tasco expects to raise its annual sales volume to 6 million tonnes over the next five years, up from 2.2 million now.
Of the increased capacity of 6 million tonnes, about 4 million will be asphalt and the rest byproducts of bunker oil and diesel, Mr Chaiwat said.
“The company also plans to expand into European countries and the US.
“By 2020, Tasco is expected to have expended its business onto five continents,” Mr Chaiwat said.
The company already has a presence in Asia, Australia and Africa.
Tasco is expected to earmark 8.5 billion baht for investment from 2015-20, an average of 1.7 billion a year.
Most of the money will go towards refinery expansion in Malaysia.
In the first nine months of this year, sales volume grew by 10% year-on-year to 1.68 million tonnes, generating revenue of 28 billion baht, down by 24%.
Mr Chaiwat said the company expected sales volume would grow by 15% for the full year thanks largely to the government’s investment in infrastructure megaprojects that would help to spur demand for construction materials.
TASCO shares closed yesterday on the SET at 39.25 baht, up 2.25 baht, in trade worth 477 million baht.