SET-listed Sahamitr Pressure Container (SMPC), the world's largest cylinder producer by capacity, expects its sales to grow by 21% to 7.5 million units this year as trade volume returns to normal.
Its cylinders are mostly used to contain liquefied petroleum gas (LPG), which is used as cooking gas, as well as chemical substances.
Surasak Urpsirisuk, managing director and chairman of the SMPC board, said demand for cylinders will increase after a delay in receiving purchase orders from North America ended.
North America and Africa are SMPC's main overseas markets, making up 70% of total sales in 2022. The remaining 30% came from sales in Thailand, Asia-Pacific, the Middle East and Europe.
The company expects its capacity utilisation to increase to 75% of total annual capacity of 10 million units in 2023, up from 61% last year, and to keep rising, reaching 86% in 2024.
Mr Surasak said global production of LPG stood at 332 million metric tonnes last year, a 1.7% increase from 2021, while 331 million metric tonnes of LPG was consumed last year, a 3.7% increase from 2021.
In 2022, SMPC saw its revenue grow by 15% to 5.2 billion baht, up from 4.55 billion baht in 2021. However, net profit plunged by 60% to 107 million baht, down from 272 million baht in 2021, mainly because some customers in the US delayed their cylinder purchases, pending a drop in the price of steel, a key raw material in cylinder production.
Mr Surasak said the firm plans to earn more revenue by selling cylinders to more customers outside the LPG segment. It is looking for products that require cyclinders as containers and offer the prospect of higher revenue.
Patama Laowong, senior vice-president of SMPC, said the firm will allocate capital spending worth 135 million baht to support various projects this year. Most of the budget will go to a plan to solve bottleneck problems in logistics, while some of the money will be spent to upgrade the cylinder production process.
SMPC spends 100-150 million baht per year improving its manufacturing process, with the aim of selling its products to major oil and chemical traders overseas.
