"We are looking at a lightning arrester manufacturing project that would allow us to achieve volumes of up to 50,000 units a year POONPHIPHAT TANTANASIN Director, QTC Energy Plc
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"We are looking at a lightning arrester manufacturing project that would allow us to achieve volumes of up to 50,000 units a year POONPHIPHAT TANTANASIN Director, QTC Energy Plc
QTC Energy Plc, formerly known as QTC Marketing & Service Co Ltd, was established on June 9,2003 with registered capital of 10 million baht to conduct the businesses of manufacturing and distributing electricity distribution transformers. Director Poonphiphat Tantanasin discusses the company's strategy and outlook.
What is QTC's business model?
QTC Energy Plc is an electricity distribution transformer manufacturer that was founded (as QTC Marketing and Service) in 1996. Our transformers are sized from one to 30,000 kVA (kilovoltamperes) and we have the capacity to manufacture on average 3,000 units per year. The majority of our business is in Thailand with the private sector representing 40%, the public sector 35%and exports the remainder.
QTC's business has grown strongly over the past few years. What is the main reason for this?
We have grown well because of our people; we have a very dynamic environment as the average age of our workforce is 30-31 years. We have strong internal systems to ensure that our products are world-class, delivered on time to customers, and reasonably priced.We use enterprise resource planning and fully computerised systems, and also apply Key Performance Indicators (KPIs), allowing our employees to realise the importance of the work they are accomplishing for the company. Because of our development internally we are able to produce a transformer within three days at an average size of 300 kVA.
How important are technological advances for your business?
The core theory is simple and does not change in regard to the injection of current and transfer of voltage, but the raw materials to produce a transformer do change over the years and we have to adapt our processes. Raw material price management is a key issue for us. We have to carefully monitor the price of silicon steel (electrical steel), round enamelled wire and copper foil.
QTC's export business has expanded tremendously over the past two years.How did the company achieve this?
Because we aim to be a world-class transformer company, we have worked hard to obtain international certifications.Today we have TSI 384-2543 from the Thai Industrial Standards Institute, and ISO 90001:2000 for design, production and maintenance of distribution transformers. The company has also been certified for testing laboratory capacity in compliance with TSI 17025-2548(ISO/IEC 17025:2005). All of this proves to international customers that we are able to deliver high-quality transformers to meet international standards.
Does QTC have expansion plans for its current business or new businesses?
We are currently working on several projects. First, we are adjusting our current systems to be able to produce power transformers that will allow us to move up a market segment from distribution transformers. We are also looking at a lightning arrester manufacturing project that would allow us to achieve volumes of up to 50,000 units a year, and also at a dry-type cast resin transformer project with Schneider (Thailand). We will also be setting up a transformer manufacturing and assembly facility in Laos as we see a lot of potential in its domestic market. Finally, we are participating in a 9.9-Megawatt biogas power plant with Universal Adsorbents Plc, Asia Green Energy Plc and Samroiyod Co Ltd, which should be completed by 2014.
How do you view demand for transformers in Thailand as well as in Southeast Asia as a whole?
In the latest version of the 2010-30 Power Development Plan for Thailand,maximum electricity demand is forecast to increase from 23,249 MW to 52,890 MW in 2030, or average annual growth of 4.42%, while electricity generation capacity will increase from 31,349 MW in 2010 to 65,547 MW in 2030, or an average of 3.96%, so we will naturally grow with the market here. Thailand currently consumes the same amount of electricity as Malaysia and Singapore despite its larger population size. Japan consumes 200,000 MW and the United States 250,000 to 300,000 MW, so when you look at the industry from this viewpoint, there is still a huge market opportunity available in Thailand, its neighbouring countries and beyond.
What are the biggest risks facing your business?
Several issues concern us. The strengthening Thai baht will have an impact on our exports, but the world economy constantly changes and evolves.We have begun to receive orders from Italy or Spain, which never happened before; the same goes for South Africa and Australia. Also, local politics can be negative as every time the government changes, policies change and this results in the private sector and investors delaying investment decisions. However,we have learned to manage these risks and aim to maintain our market share in each sector.
What impact will the Asean Economic Community have on your business?
The AEC will be positive for us because we have already achieved world-class standards and our exports have grown well internationally but not yet in Southeast Asia. Given that there are no barriers within the region, we believe that there will be business opportunities and we may have to set up assembly plants in other countries' promoted investment zones for logistics and tax purposes.
Where do you see QTC in five years from now?
Within five years we aim to achieve turnover from the transformer business in Thailand of 1.5 billion baht, and combined with expansion into other ventures, we hope that we can realise more. Our aim as a company is to continue growing every minute.
The Executive Q&A Series is presented by ShareInvestor, Asia's leading financial internet media and technology company and the largest investor relations network in the region, with more than 400 listed clients.This interview was conducted by Pon Van Compernolle, editor of www.thaicapitalist.com. For more information, email pon@thaicapitalist.com or supat@shareinvestor.com or visit www.thailistedcompany.com
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