Bangkok, May 22 - Thai Vegetable Oil PCL expects net profit to rise this year because soybean prices have recovered from lows hit in December and it will have no inventory loss, director Charuphot Neesanant said.
The company, Southeast Asia's largest soybean meal and oil producer, was speeding up construction of a new plant that would start operations from the second quarter of 2010 rather than the third quarter, as previously planned, he told Reuters.
"We suffered from losses on inventory last year. Without this inventory problem, it (net profit) should be OK this year ... It should be better than last year," he said in an interview.
Thai Vegetable Oil, whose soybean meal contributes two-thirds of revenue, posted a 750 million baht ($9.34 million) net profit in 2008, down 40 percent after it booked a big impairment to inventory value to reflect falling soybean prices.
Two analysts polled by Reuters forecast an average 1.06 billion baht net profit for 2009.
Last year the global soybean price fell from a high of $16 per bushel in July to as low as $8 per bushel in December due to the economic crisis, Charuphot said.
The price is now in the region of $9 per bushel and he forecast it would rise to $9.5-$10 for the full year as global soybean supply had tightened.
"It's still in a low range and close to the costs borne by soybean farmers," he said.
"Our business is back to normal. We are also aiming for a higher gross margin than the industry rate of 9-12 percent in the second half of this year," he added.
The company forecast flat 2009 revenue, he said. It had 23.6 billion baht in revenue in 2008.
Cooking oil accounts for 35 percent of revenue, including exports, which go mainly to other Southeast Asian countries.
A BETTER 2010
Thai Vegetable Oil has a 60 percent share of the 1 million tonne domestic soybean meal market and is running at its daily soybean crushing capacity of 4,000 tonnes at its three existing plants in Thailand.
It also has a 65 percent stake in a Chinese plant, which has a daily crushing capacity of 800 tonnes and supplies the Chinese market. This is running almost at full capacity but the company had no plans to expand, he said.
Chinese revenue contributes about 10-12 percent of its total.
The new Thai plant will enjoy tax exemption on revenue from soybean meal sales under a Board of Investment incentive.
It would initially add 1,000 tonnes of crushing capacity per day, allowing the company to take a bigger share of the soybean meal market while enjoying reduced taxes, Charuphot said.
Eventually the new plant will have a full crushing capacity of 2,000 tonnes a day.
The company supplies the domestic feedmill industry and counts Charoen Pokphand Foods, Thailand's largest chicken exporter, among its big clients.
Thailand consumes 3 million tonnes of soybean meal per year, with about 2 million tonnes imported.
Thai Vegetable Oil supplies about 600,000 tonnes.
It planned to spend 1 billion baht in 2009 and another 300 million baht next year to complete the new plant, with funding from bank loans, Charuphot said.
At midsession, Thai Vegetable Oil shares were up 1.44 percent at 14.1 baht while the main Thai SET index was down 0.3 percent. The shares have risen 63 percent so far this year, outperforming a 21.6 percent gain in the SET index. ($1=34.32 Baht).