SIAM GS GRAES FOR DEMAND

       Siam GS Battery is expanding its capacity next year on optimism that demand for replacements from car owners and for new batteries among auto-makers will increase following the economic recovery.
       The company has set aside Bt75 million for capacity expansion at its Bang Phumai plant.
       The investment will increase production capacity from the current 3.5 million units per year to between 4.2 million and 4.5 million units per year, said Saran Chinprahat, managing director of Siam GS Sales, the marketing arm of Siam GS Battery.
       "The expansion is to serve the expected higher demand next year in the domestic market by those who want to replace their old batteries and by the car manufacturers," Saran said.
       He added that manufacturers are expected to boost their vehicle production capacity in the second half in line with the signs of the recovering economy.
       He said the company would install new machines at the Bang Phumai plant in October as part of the production capacity expansion, and the plant would test run the new machinery in November.
       "Also, we will renovate our existing plant in order to maximise the utilisation space," he said.
       Of the company's total current production, 60 per cent is for the replacement market, while another 30 per cent supplies the auto-makers on the Original Equipment Manufacturing basis (OEM). It exports the remaining 10 per cent mainly to the Asean market, including Burma, Laos and Cambodia.
       For the replacement market alone, GS Battery targets to sell 1.9 million units of the batteries this year, of which more than one million units were achieved in the first seven months.
       "We target a 50-per-cent share of the replacement market this year before rising to 60 per cent next year after the capacity expansion, up from the present level of around 40 per cent," Saran said. Total sales of batteries in Thailand is about four million units per year.
       The company also launched its latest product model, the D-Tech (Dry-MF Technology) battery, in the middle of last month, which targets the replacement market.
       "Our performance in the domestic replacement market during the first half of this year was satisfactory, as it saw year-on-year growth of 15 per cent in value and 50 per cent in volume," he said.
       He said that GS Battery was also the leader in the OEM market, with 55-per-cent market share.
       Saran said the company had seen a significant drop in its OEM sales by almost 40 per cent year on year in the first six months of this year due to a heavy decline in automotive production and sales in Thailand.
       "However we have seen a better sign of recovery for OEM production, especially in the second half of this year. Many carmakers to which we supply batteries, such as Toyota, Isuzu, Mitsubishi, General Motors, Tata, Mazda and Ford, have started to increase their vehicle production," he said.