Dr. Tongtaj Hongladarom
Chairman of the Board of Directors
In 2015, transformer industry both local and overseas have been improving since 2nd quarter of 2015 including a less intense of price competition, resulting the received order of utility, private and export sectors increased by 25%, 42% and 56% respectively and the backlog as of 31 December 2015 was at 1,419 million baht compared to 2014 at 955 million baht or 48.58% increase which increased in gross margin up to 20%-25% as per the Company policy.
In 2016, in order to be in line with the current economic situation, the Company and its subsidiaries has started its 3 year business plan (2016-2018) with revenue target in 2018 of 5,000 million baht which will drive from increase its production capacity from 5,000 MVA to 9,000 MVA as a result of, the new transformer plant which will start its first production in the 3rd quarter 2016, an increase in transformer demand from PDP 2015, new product design, and increase new business of the group. Moreover the Board of Director has seen an important of Private Sector Collective Action Against corruption (CAC) which TRT had become a signatory company in the 2nd quarter of 2015 and expect to apply for the certification by the 4th quarter of 2016 and also have realized on the environment concern by promoting a campaign "Slime Waste" with Reduce/Reuse/Recycle since 2013 until now in order to build the TRT's environmental culture with training course on a yearly basis. TRT was certified as Green Industrial level 3 of well environmental management in 2013, received Green Start Awards from Industrial Estate Authority of Thailand in December 2015 and expect to apply for Green Industrial Level 4 of green culture in June 2019
As one of the Board members, I would like to ensure that the issuance of the appropriate policy and strategy, the effectiveness of management including other suitable measures will manage the risks in controllable level. Moreover the compliance with good governance is one of mission to ensure the sustainable growth and gain trust among all stakeholders.
On this occasion, I on behalf of the Board of Directors, would like to express my sincere gratitude to all shareholders for the trust in the Company and all patrons for the constant support. Also, my thanks extend to the management and every staff member who have cooperated with one another, been dedicated to their duties, and been responsible for the assignment. This plays the major part in the business' strength, resulting in the company's stability, sustainable growth and goal achievement.
Dr. Tongtaj Hongladarom
Chairman of the Board of Directors
Mr. Sumpan Vongphan
In 2015, the local demand of transformer had improved continuously since the second quarter of 2015, as a result of an increase in spending of government budget including implement an appropriate strategy, especially export sector, concentrating to the special power transformer market with high profit margin, giving the received order in 2015 of utilities, private and export sectors increased 25%, 42% and 56% respectively from last year. As a result, it caused a less intense in price competition and push up the backlog as of 31 December 2015 to 1,419 million baht compared to 955 million baht in 2014 or 48.58% increase from last year which increased in gross margin up to 20%-25% as per the Company policy. Although the operating results for the year 2015 was net loss attributable to equity holders of the parent of 48.97 million baht, resulted from cost overrun of EPC of Ash Conveyor Belt System project of Hongsa Power Co.,Ltd, Laos PDR or represent 4% of revenue from sale and service of the Company and its subsidiaries but it has created value added in term of expending its new business i.e. EPC conveyor belt system, main contractor, and construction especially in mining and power plant field which have a less player and would like to share a market in these types of business in the long run and also being use as a reference as well. LDS also had received a good feedback from HPC in respect of high quality of work with well standard practice. This EPC project was also being a tank of knowledge of LDS employee to learn and develop their skills to be a professional in this field of business which it assures that the assessment of biding price of project/contract will be more accuracy and abided by the company policy. The bid and quotation in hand of the EPC project as of 31 December 2015 was about 290 million baht of which expected to be order in hand of 40%-50%.
The outlook of 2016, the company expects that the transformer industry will be improve continuously, resulting from PDP 2015, announced on 30 June 2015, will drive a raise in the transformer demand with new power plants project and Transmission System Development project which is one of EGAT's main responsibilities conducted in order to cope with continuously growing power demand and to reinforce power system reliability and also to be in line with ASIAN GRID demand. As a result, it causes an increase demand of power transformer rated 500/230/115 kV with EGAT investment budget from 2016-2020 of about 10,000 million baht or 2,000 million bath in average per year in which TRT expects the market share for this project of about 25%-30%. As a new transformer plant will run it's first production in August 2016, the production capacity will be increased from 5,000 MVA to 9,000 MVA which will support TRT's growth for the next 5-7 years. The PDP 2015 will cause a less intense in price completion which will make TRT to be able to gain its gross profit margin of 20%-25%. For the export sector, the Company will expand market base in line with the economy growth of AEC and Asia countries in term of both increase its foreign agents together with develop and design its products more effectively in order to gain more the competitive advantage. For the private sector, the Company will be emphasized on energy industries which the Company is keen in giving advice in relation to technical and engineering design to its customers in order to match their needs. With regard to TRT E&S, it will drive its revenue growth 15%-20% as per its 3 year business plan. With regards to new product as Gas Insulated Switchgear (GIS) which expects to receive the first order in 2016-2017 and also expand the market base of the transformer service to utilities sector. For L.D.S. Metal Work, it plans to increase its competitive advantage in term of obtaining the USTAMP standard as the value added for high quality fabricate steel structure for power plant and mining industries together with expanding its market base not only EPC especially, conveyor belt system and construction but also operation and maintenance service of conveyor belt system for power plant and mining business both local and overseas. LDS also plan to increase the efficiency of its staff to cope up with its expansion business. The Company and its subsidiaries have backlog as a whole as of 31 December 2015 of 2,969 million baht of which 1,992 million baht to be delivered in 2016, 325 million in 2017, 352 million baht in 2018 and 300 million baht in 2019. The bid and quotation in hand as of 31 December 2015 was appox. at 12,452 million baht which expected to be order in hand about 20%-25%. The Company and its subsidiaries therefore, have enough backlog and moreover there are large number of quotation in both local and export markets including the utilities budget as at 31 December 2015, which will make the Company and its subsidiaries to have a chance to select the high margin market and is big enough to achieve revenue target in 2016 of 3,432 million baht and also with the expected gross profit margin of 20%-25%. However the Company still monitors the situation closely and adjusts the strategy to be suite to the situation. Moreover, the cost effective control and other measures will be implemented to manage the risk at a controllable level to ensure that the Company will run the business as plan with appropriate control.
On behalf of all executives and staff, I will commit to run the business in compliance with our vision and mission and with good corporate governance to ensure that the Company will be the leader in manufacturing and distributing the transformer as well as providing integrated service in Asian and Oceanic region with a sustainable growth and with value added to its business for the best benefit of all stakeholders.
Mr. Sumpan Vongphan