Rise in steel prices expected to boost Asia Metal

Asia Metal expects revenues to grow 10 per cent this year to Bt5.5 billion on anticipation of an increase in steel prices, says managing director Chusak Yongvongphaiboon.
There is currently a supply shortage in the metals market, and demand for steel is expected to increase once the Kingdom's investment confidence improves, partly driven by the government's decision to open bidding for Bangkok's five new rapid-transit rail routes, he said.
As a result, steel prices will increase in the first half of the year, Chusak said.
A new manufacturing plant, to be located in Chon Buri province, will increase the company's annual production capacity by around 180,000 tonnes. Asia Metal's revenues last year totalled Bt4.83 billion. Its steel and fabrication operations made Bt3.62 billion and Bt1.21 billion, respectively.
The company also reported a net profit of Bt172.18 million for last year, up significantly from Bt80.56 million in 2005.
"Our sales revenues and services in 2006 rose a little bit, but our net profit jumped almost 114 per cent, thanks to the company's cost controls and management efficiency. Our gross margin increased from 4.82 per cent in 2005 to 7.99 per cent," Chusak said.
Asia Metal plans to extend its core businesses through a partnership deal, which will take place after its new plant has been completed in the fourth quarter.
Chusak said the Securities and Exchange Commission was expected to approve the company's capital-increase plan, which is expected to take place this month or early next month.
Asia Metal plans to increase its registered capital from Bt400 million to Bt550 million by issuing 150 million new shares. Of these, 100 million will be allocated to existing shareholders, and the rest will be reserved for warrant conversion.
The company expects to raise Bt600 million to Bt700 million from the share offering, which will be used to finance business service-centre expansion and new plant construction, and debt repayment.