Air-con deals aid SNC margin

       SNC Former Plc, a SET-listed maker of steel and aluminium parts for airconditioners, expects its margins will improve next year after it concludes deals to supply four foreign air-conditioner producers.
       SNC chief executive Somchai Thaisanguanvorakul said the company was in talks with companies in Japan, Australia, the Middle East and the United States to supply air-conditioner parts designed and developed by SNC.
       "The first deal with a Japanese airconditioner producer is likely to be completed late next month or in early December and the others early next year.These bulk sales will boost our revenues and margins next year," he said.
       Initially, the Japanese company wanted to hire Chinese suppliers to produce parts for it but SNC sent it some sample products for consideration. Its executives were impressed by the high quality of Thai products, which are priced similarly to the Chinese parts.
       SNC forecast that it would achieve 20% revenue growth this year, from 4.04 billion baht last year. The company has invested 200 million baht in new machinery and equipment so far.
       Next year, SNC's profitability and net margin are expected to improve from 3% this year as the products to be sold to the four new customers are being developed locally from upstream to downstream production.
       Mr Somchai said the new deals would also lift the company's production capacity by 60% from one million units of air-conditioners per year.
       "Demand for air-conditioners has shrunk due to the global economic slowdown. However, new orders are improving after many people expect that the global economy will pick up next year," he said.
       In the first half, SNC posted a net profit of 71.69 million baht on revenues of 3.07 billion. In the second quarter alone, its net profit was 37.39 million and revenues totalled 1.5 billion baht,of which 1.04 billion came from OEM (original equipment manufacturer) contracts and the rest from sales of residential and automobile air-conditioner parts.
       SNC shares closed yesterday on the SET at 6.25 baht, up five satang, in trade worth 1.6 million baht.