Hana yet to see impact from US
Hana yet to see impact from US
NAREERAT WIRIYAPONG
The SET-listed electronic parts maker Hana Microelectronics Plc says the global electronics industry had yet to see major impacts from the US financial crisis. Executives, however, declined to say whether their projection this year of 15% growth in US dollar revenue, from $452 million in 2007, is still achievable.
Chief executive Richard Han said that while more than half of Hana’s customers were US firms, they were large multinationals with global exposure.
Hewlett Packard (HP), for example, has a presence worldwide, including China and South America, he said at the Thailand Focus 2008 investor conference.
”People started talking about the US recession about a year ago but so far the US economy has not gone into recession. Demand has not fallen yet,” he said.
”Meanwhile, the growth of Hana’s business over the past six months came from Asia not the US. Even as the US market slows, Asian economies are still strong.”
Mr Han said Hana had invested $22 million this year to expand its factories in Lamphun and Ayutthaya with a small amount going to China. This year, capital expenditure would total $30 million compared with $50 million spent in 2007.
Chief financial officer Terrence Weir said the baht’s weakness could hurt Hana’s margins while oil prices have had a slight impact on production costs.
”As oil prices start falling, it would help reduce inflationary pleasure in Asia. This is good for us,” he said.
Mr Han said Hana was seeking opportunities abroad by looking for companies to merge with or buy in China, the US and Taiwan in the integrated circuit (IC) and printed circuit board assembly (PCBA) businesses.
Ticon Industrial Connection Plc echoed Hana, with executives telling the forum that a US slowdown could be a windfall for Thai industrial estates.
”If the recession in the US gets worse, the electronics industry might be affected,” said Ticon managing director Virapan Pulges. But looking back to the dot-com bust in 2001, US electronics makers then closed their factories in the US and relocated to Thailand where costs are cheaper.
The electronics sector accounts for about half of Ticon’s customers, followed by automobiles. US customers represent about 6% of Ticon’s clients. Despite local political strife, he said industrial land sales also had yet to be affected.
Hana shares closed yesterday at 16.50 baht, down 30 satang, and Ticon closed at 12.50 baht, down 1.20 baht, in trade worth 34.94 million baht.
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Tags: Asian Economies, Ayutthaya, Baht, Capital Expenditure, Circuit Board Assembly, Global Electronics Industry, Global Exposure, Hana Microelectronics, Hewlett Packard Hp, Integrated Circuit, Investor Conference, Lamphun, Multinationals, Oil Prices, Pcba, Printed Circuit Board, Printed Circuit Board Assembly, Recession, Us Slowdown, Windfall