Thailand’s top electrical power transformer manufacturer, Tirathai Plc (TRT), is diversifying into steel structure manufacturing after expanding into the hydraulic derrick line truck business in June.
The company’s board approved a plan on Monday to acquire 85% of L.D.S. Metal Work for 40 million baht.
L.D.S. is a manufacturer of steel parts for transformers that has supplied TRT for a long time.
TRT managing director Sumpan Vongphan said once the transaction is finished TRT plans to increase transformer steel part capacity to 12,000 tonnes per year with an investment of 210 million baht, up from 5,000 tonnes at present.
Commercial production from the capacity expansion is expected to start by the end of next year.
Governments in Asean are planning road and train improvements, making steel structure manufacturing timely. TRT will soon talk with leading Austrian-based producers about technology joint ventures for this project.
“The transformer market in Thailand will likely become mature over the next several years, so we have to diversify into other businesses that are related to our core business,” said Mr Sumpan.
TRT issued a 600-million-baht debenture in June to raise funds for business diversification and working capital.
June is also when it set up Tira Thai Engineering and Solution (TRTES) for manufacturing hydraulic derrick line trucks. TRTES expects sales of 200 million baht this year.
The company is also planning to diversify into electrical switch and energy-saving equipment to tap into healthy demand in Asean, but he didn’t provide further details.
More diversification will be announced in the second half this year.
TRT expects total sales including those from its new business units will jump to 5 billion baht by 2017 from 1.8 billion a year ago. Sales this year are projected to grow 20% to 2 billion.