Page 12 - Annual report eng 2019

Tycoons Worldwide Group (Thailand) Plc.

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 before the end of 2020. Therefore, the outlook of Thailand’s steel
market is expected to bloom in the future.

Bans on Thai steel plant expansion

Steel plant expansion and construction of steel bar plants will be banned for the next five
years in Thailand to reduce the domestic surplus, according to an industry Ministry draft
regulation the cabinet approved on Jan 29, 2019. The government calls on steelmakers to
improve their technology, upgrade steel quality to meet high standards and solve SOx and
NOx emission levels to prevent outdated technology from polluting surrounding
communities. The new regulation has entered into force on January 11, 2020.

New capacity in neighboring countries
Vietnam has complete new steel plant with annual capacity of 7.1 million tons in early
2018, Malaysia Alliance Steel also completed a steel plant with an annual capacity of 5
million tons in the first quarter of 2019, The excess capacity from these two countries was
dumped to Thailand in 2019, causing Thai steel prices to fall. The company has join with
others steel making factory and submitted anti-dumping investigations in these two
countries to the Thai government in order to curb improper low-price dumping.

2.3 Procurement of products/services

1. Production

The company could achieve maximum production capacity of 500,000 tons/year if it
were to produce only a single type of wire rod (that used for bar in coils), since it is less
time consuming to make than other types of wire rods. Actual capacity will be lower, at
approximately 360,000 tons/year, if the company produces a combination of mixed
product range with different grades. And the company also could achieve maximum
production capacity of 142,000 tons/year if it were to produce only a single process of
annealed wire. Actual capacity will be lower, at approximately 100,000 tons/years, if it
were produce over a single process of annealed wire.

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