Friday, July 2, 2004
Thai tech firms in expansion mode
REUTERS
BANGKOK: Thai electronics firms, suppliers to global manufacturers such as Motorola and Philips Electronics, are expanding capacity aggressively at home and in China to tap rising demand.
"We work 24 hours a day and seven days per week," Issra Sivakul, general manager of Hana Microelectronics PCL., told reporters during a tour of a chip factory in the central Thai town of Ayutthaya.
"Our staff has increased continually," he said as workers in white smocks, masks and plastic caps supervised equipment in dust-free rooms. "We plan to hire more and have ordered new machines to raise capacity."
The chip plant has 2,700 employees, up from 1,800 last year, and an advertisement on white canvas in front of the factory seeks a further 500 production staff.
The plant is running at almost full capacity after production nearly doubled in the October-December quarter from a year earlier, assembling 7.5 million integrated circuits used in products such as digital cameras and mobile phones. Cal-Comp Electronics (Thailand) PCL., whose products include ink-jet printers for Hewlett-Packard and mobile phones and accessories, is also advertising for 500 new workers. The new jobs, at its two factories in central Thailand, would boost staff numbers to 8,000 by the end of 2004 from about 7,000 now.
"We are running at full speed. We are hiring more staff and buying new machines as it is approaching the third quarter, which is very busy for Cal-Comp," said investor relations manager Naririn Tantisajjatham.
Employment to soar
The boom reflects growing global sales of gadgets such as mobile phones and digital cameras and a Thai government policy to promote investment in its electronics industry, particularly in hard-disk drives. Electronics parts accounted for 20 per cent of Thai exports in the first four months of this year.
The government expects employment in the sector to rise over the next few years from more than 200,000 people now to 300,000, the level before the Asian economic crisis of 1997-98.
Cal-Comp, Thailand's third-largest electronics firm, expected sales to rise to $420 million in the third quarter from $378 million in the second quarter, Naririn said.
In June, the company raised its 2004 sales forecast to $1.45 billion, double 2003's sales, due to rising orders for Bluetooth wireless devices, set-top boxes for cable television and printers.
Hana's plant in Bangkok is also running at almost full capacity, making lighting products for Mercedez Benz cars and displays for taxi-meters and signs.
Hana, which counts Agilent Technologies and Texas Instruments as major clients, employs a total of 6,400 people.
"Demand is outstanding this year. The industry is just taking off in a four-year up-cycle until 2007," Issra said.
Like other global electronics firms, Cal-Comp and Hana are expanding their plants in booming China.
Cal-Comp, a unit of Taiwan contract manufacturer Kinpo Electronics, is due to start building its third plant in China in the third quarter and begin production of home entertainment products in the second quarter of 2005.
"China is the key growth driver for us," Naririn said.
Hana, which has doubled its investment budget to $50-$55 million this year, is scheduled to complete building its second plant in China in October.
"The plants in China will help us offer more competitive prices and compete against rivals there," said Issra.
Analysts expect Hana's net profits to rise 23 per cent in 2004 to 1.97 billion baht ($48 million), according to Reuters Estimates.
Hana shares are unchanged from the end of last year, far outstripping a 16.25 per cent drop in the main stock market index.
Cal-Comp's profits are expected to rise nine per cent to 1.62 billion baht. Its shares are up 3.03 per cent this year.
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