By Warapan Phungsuk
BANGKOK, Aug 19 (Reuters) - Thai Storage Battery Plc , Thailand's largest maker of batteries for vehicles, forecast on Monday up to 20 percent growth in profit this year, fuelled by robust domestic and regional vehicle markets.
Financial Manager Khamnung Wanichachiwa told Reuters in an interview the company's 2002 revenues should grow by 10 to 15 percent from 1.62 billion baht ($38.76 million) in 2001 due to strong demand, especially for export markets.
"Chances are high of a 20 percent growth in net profit this year, the highest growth for the last three years," Khamnung said.
Thai Storage, which has benefited from a recovery in the Thai vehicle industry over the last two years, saw net profit grow 71 percent in the first half on the year after lacklustre operations since the Asian financial crisis of 1997-1998. It made net profit of 101 million baht in 2001.
By Monday's midsession break, Thai Storage shares were up 2.0 percent at 38.5 baht, while the main composite SET index was down 0.74 percent. The stock has gained 57 percent this year, outperforming the overall market, which has risen 22 percent.
Automotive Resources Asia forecasts domestic vehicle demand in four major Southeast Asian nations to be about 1.4 million units by 2006 from 1.07 million in 2001. Demand was just 481,000 units in 1998.
Thai Storage has the capacity to produce 1.8 million units of BAT-3K batteries a year. It is the country's biggest battery maker in terms of capacity, followed by Japanese-run Yuasa Battery and GS Battery.
The firm exports 60 percent of its products to 40 countries with main markets in the Middle East and Indochina, and plans to tap new markets in Africa and Japan, Khamnung said.
The firm ranks second in Thailand's replacement battery sector, after GS Battery, in terms of market share.
Khamnung said the firm's production costs would fall significantly in the second half after Thai authorities cut the import tax on refined lead from China to one percent from 10 percent last June.
Lead accounts for 25 percent of total production costs.
Khamnung said Thai Storage planned to upgrade its factory machinery to produce high value-added products aimed at the top-end of the battery market this year in preparation for any competition from China.
"Producing batteries is low-end technology which China has a chance to easily keep up with us. We have to focus more on high-end products where there are fewer competitors," Khamnung said. ($1=41.80 baht)