Page 11 - Annual Report English 2018

Tycoons Worldwide Group (Thailand) Plc.

Moreover, as Thailand’s GDP grew to a certain level, Thailand has been excluded
from the EU’s GSP (Generalized Scheme of Preferences, form A) which allows
developing countries such as Vietnam and Indonesia to pay less duty on their exports
to the EU. That might make downstream producers less competitive in exports to the
EU, while TYCN might hardly get affected by that.

Thai government imposed provisional anti-dumping tariffs from 15.59% to 33.55%
on imports of Chinese low-carbon wire rods in September of 2015, and then in March
of 2016, the final results of its anti-dumping investigation announced the anti-dumping
tariffs from 12.81% to 31.15% for five years, which is conducive to the stability of the
prices of domestic wire rods. However, some importers avoided the tariff by changing
imported goods names. According to Thai government’s announcement in 2017,
Thailand will put more effort into customs investigation to avoid large amount of
imported low-carbon wire rods, in order to prevent domestic producers from suffering
from Chinese low-price products, further making a healthy development in domestic
steel industry. Moreover, Thai government announced its reviewed results of anti-
dumping in August of 2017, which broadens the range of anti-dumping by adding
more regulations on alloy ratio. As for wire rods in overseas market, TGE is TYCN’s
agent in Taiwan which is the main overseas market in which TYCN has a firm
customer base, and the market will stay stable.

Upgrades in infrastructures and industries
In mid 2016, Thai government announced “Thailand 4.0”, an economic development
plan, which is the blueprint of industry upgrades across 20 years from 2017 to 2036.
The plan includes the development of six key area and ten popular industries, and at
least 3,000 billion baht in rail way and high way system. The goal of this plan is to
make Thailand more attractive to investors, to develop Eastern Economic
Corridor(EEC), and to strengthen the country’s competitiveness by reducing the
transport cost. In order to speed up EEC, the flagship project, Thai government has
invoked the powerful Section 44 to enable authorities to bypass some laws and
regulations that may put the project on hold. EEC Projects that has been launched in
2018 include high speed rails linking 3 international airport, Laem Chabang port phase
3, U-tapao airport, Map Ta Phut's port expansion and development of highways and
double-track rails in the three EEC provinces. Other projects are eastern airport city,
aircraft repair and maintenance hub at U-tapao and the Bangkok-Rayong high-speed rail
network. Domestic steel demand will benefit from the launch of those infrastructures in
2019. Therefore, the outlook of Thailand’s steel market is expected to bloom in the
future.

TY Steel Company Limited, TYCN’s associated company, started its EAF operation
in September of 2014, and then in 2016, in order for TY to well utilize its EAF and to
broaden its product demand, TY started to build a new rolling mill for producing
deformed bars with capacity of 600,000 tons per year. The rolling mill is going to be
the first direct rolling mill in Southeast Asia. it has started producing and selling
deformed bars in January of 2018 with a TISI license. Combined with TYCN’s rolling
mill of wire rods, TYCN group will be able to provide a whole range of steel products
and meet the demand of infrastructures in Thailand and Southeast Asia.

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