Diamond Roofing Tiles expects strong growth

Diamond Roofing Tiles Plc (DRT) expects next year's sales will grow by at least 10% as pent-up orders from this year will be carried over, said Satid Sudbuntad, the company's vice-president for sales and marketing.

''This year many developers delayed construction as the government's plans for construction of utilities, transport and mass transit were frozen,'' he said yesterday.

About 80% of its orders were temporarily suspended but the company expects orders to resume next year. Most orders were from spas and resorts in western and eastern Thailand.

During the first nine months of the year, DRT recorded 1.97 billion baht in sales, up by 6% from a year earlier. It hopes to generate 2.6 billion baht by the end of the year. Net profit for the first nine months was 316 million baht, an increase of 29% from 242.2 million a year earlier.

''I don't believe next year will be worse as the country has faced a bad economy for the past two years,'' Mr Satid said.

Despite the higher cost of production, DRT plans to reduce roof tile prices offered to its agents by at least 3% starting from Jan 1. The discount is possible as the company has benefited from the stronger baht and it has also shifted to use petroleum gas as fuel, said Mr Satid.

In 2008, the company plans to use premium Jearanai roof tiles as a flagship product and had seen a favourable response from customers, especially architects.

About 80% of interested customers planned to use premium tiles for spa and resort development.

''Jearanai will help us climb to the higher-end segment as it has light weight, is a market trend and is produced with new fibre-cement technology,'' said Mr Satid.

By the second quarter of 2008, it will introduce two more premium tile designs in rectangular and curved-rectangular shapes. Currently, it produces only a kite shape that has some design limitations.

The company will also offer new services for Jearanai roof tiles with installation and a five-year guarantee at an approximate price of 200 baht per square metre. It will set up a training centre at its headquarters in Saraburi for agents and subcontractors in the proper installation of Jearanai tiles, which require a different technique from other tiles.

Mr Satid said the company expected sales of 120 million baht from Jearanai roof tiles in 2008, up from 30 million in 2007. The company expects to be operating at full capacity if the real estate market picks up.

DRT this year spent 465 million baht on a new production line for fibre-cement tiles, which will take 18 months to complete.

The new production line would have a capacity of 60,000 tons a year worth 600 million baht.

Construction would be completed in the second quarter of 2009. By mid-2009, DRT expects to generate 300 million baht from the new production line, he said. Currently, its full production capacity is 500,000 tons a year.

DRT shares closed yesterday on the Stock Exchange of Thailand at 2.76 baht, unchanged, in trade worth 792,000 baht.

Source: Bangkok Post by Kanana Katharangsiporn
Wednesday December 19, 2007