Roofing firm DRT to switch away from asbestos products

Diamond Roofing Tiles Plc (DRT), a SET-listed roofing tiles and synthetic wooden wall panel manufacturer, plans to diversify into non-asbestos smooth boards with a 300-million-baht investment this year. The DRT board is expected to finalise the plan within six months, according to vice-president Satid Sudbuntad.

Mr Satid said the new production line, which could make 40,000 tonnes of smooth boards per year, would be located at DRT's factory in Saraburi province. It could come online in mid-2008 at the earliest.

DRT could use its operating cash for the entire investment programme since the company has cash flow worth 500 million baht at present. It also has no other investment plans this year.

However, DRT may opt to borrow money in order to enjoy the lower interest rates, said Mr Satid.

The company plans to invest 300 million baht in the next five years to convert its six production lines for asbestos-based roofing tiles and synthetic wood wall panels to make non-asbestos products in an effort to offer safer products.

DRT is using Belgian expertise to manufacture non-asbestos products at two of its eight production lines. Therefore, if asbestos is banned in the next five years, the company would be able to switch to other materials, said Mr Satid.

''If the conversion plan could be completed within the timeframe, it would also depend on how warm the markets respond to new products, because prices would increase by 30% at least, and the asbestos-free products must prove their durability is not much different from asbestos-mixed products,'' said Mr Satid.

The market value of roofing tiles is approximately 10 billion baht this year, an increase of 3-5% from last year. DRT is Thailand's third largest manufacturer and distributor of roofing tiles with a 19% market share. The largest player is Siam Fibre-Cement Co Ltd with 50%, followed by the Mahaphant Group with 25%.

Mr Satid said the roofing tile market was growing at 3-5% without any market stimulants. Now about 65% of DRT's sales revenue stems from roofing tiles, 15% from synthetic wall wood and 15% from concrete tiles.

''The fibre tiles market is now in a mature cycle so our projection is to increase sales from our product mix,'' said Mr Satid.

The sales proportion of synthetic wood wall panels would be revised up to 40% in the future from 15% at present, he added.

DRT expects its sales to rise 10% to 2.6 billion baht, from 2.39 billion in 2006.

DRT shares closed yesterday on the SET at 10.20 baht, up 10 satang.

Source: Bangkokpost
Thursday May 03, 2007