 "Tata Steel Thai unit sees return to net profit in 2015-16 on rise in demand, prices")
Tata Steel Thailand PCL, the Thai unit of India's Tata Steel Group, said on Thursday it expected to return to net profit for the fiscal year ending March 2016, lifted by rising steel prices and higher demand.
The company, which made a net loss of 609.7 million baht ($18.23 million) for the fiscal year ended March 2015, aims for sales growth of 12%, to 1.25 million tonne, in the current fiscal year, President and Chief Executive Officer Rajiv Mangal told reporters.
Domestic demand for steel is expected to rise 4% to 5%, to about 18 million tonne this year, he said, adding that demand should accelerate in the second half as the government increases spending on major infrastructure projects.
"With the country's GDP growth forecast of 3%, demand will rise about 4 to 5% a year," he said.
Domestic demand is expected to reach 20 million tonne over the next five years, while Tata Steel aims to have sales of 1.7 million tonne over the next three years, Mangal said.
Prices of steel bar have bottomed out and risen $10 per tonne since March and the spread between prices and costs should be higher than last year's 7,800 baht per tonne, he added.
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But Thai steel makers are affected by an increase in steel imports from China. That prompted the company to focus more on exports to Southeast Asia, Australia, New Zealand and India.
Exports are expected to rise to 12% of sales this year from 7% last year, Mangal said.
The company also planed to seek approval from its board in July on a plan to wipe out its accumulated loss of 3.4 billion baht in a bid to pay a dividend to shareholders, Mangal said.
The company last paid a dividend in 2008.
($1=33.4500 baht)