Thailand Economic Tendency in 2007

Thailand’s economic in year 2007 has been forecasted by The Office of National Economic and Social Development Board for economic growth at  4.5-5.0 %. The accelerated factors for the growth are; a 160,000 Million Baht Government Mega project Electric Train,   an expected recovery of travel industry which is 6.0% of GDP, lower interest rate and export.

However, Thailand may face many risk factors from both inside and outside the country such as oil price fluctuation, terrorism, US and global economic that affect the oil price in global market, and economic of partner country. Risk factors in Thailand such as confidence of consumers and investors as well as political unstablility.

Industry Condition and Trend

• Electrical engineering and Electrical and Machinery System
  

On April 27th, 2006, the Electricity Forecast Committee has predicted electricity Base Case, calculated from GDP, average at 5.2% per year in 2007-2010 as follow

Peak Demand (MW)
In 2005, Peak Demand at  20,537.50 MW, increased from 1,211.70 MW or 6.27 in 2004. Base Case Peak Demand in 2006 has been forecasted at 21,963 MW and would increase  to  29,337 MW in 2011, or average at  2554 or  5.96% per year.

Energy Requirement –(unit at Million Unit GWh)
In 2005, Energy Requirement at 134,827.44 GWh, increased  7,370.21 GWh or 5.78% in 2004.      Base Case Peak Demand in 2006 has been forecasted at 143,724 GWh and would increase  to 191,772 GWh or 5.94% per year  in 2011.

F: Forecast
Source: Electricity Demand Forecast: the Electricity Forecast Committee April 2006

According to continuously increasing of electricity demand average at 6% per year, relevant agency such as EGAT, MEA, PEA and other independent electricity providers plan to increase their investment to support the prediction of The Energy Policy and Planning Office.

Besides, The Electricity Development Plan 2004-2015 as the cabinet approval on 24 April 2004, is also the opportunity for the Electricity providers company for their business expansion in the next 10 years.  Demco plans to bid in the EGAT’s projects of Transmission Line  230-500 KV value of 13,463 Million Baht in 2006, value of 16,916.09 Million Baht in 2007 and value of 15,829.34 Million Baht in 2008. MEA’s projects of Substation, Transmission medium and low voltage, underground electric system, electric pressure adjustment from 12KV to 24 KV in value of 12,923.18 Million Baht in 2006, value of 10,093.93 Million Baht in 2007, and 10,578.02 Million Baht in 2008. PEA’s projects of Substation, Transmission value of  13,750.93 Million Baht in 2006, value  of  13,426.20 Million Baht in 2007 and value of  12,990.39 Million Baht  in 2008.

• Telecommunication Tower

The Government ‘s long tern Development Plan of Telecommunication (2005-2007) aims to support telecommunication services thoroughly and equally. Thus the relevant telecommunication companies are planning their business expansion plans according to the government plan such as :

• TOT Public Company Limited’s plan
  • TOT Wireless Broadband
  • Mobile phone – Thai Mobile joint venture to expand telecommunication network of 1900 MHz system to be the 3G mobile which can support wireless multimedia.
• CAT Telecom – CDMA Nationwide service expansion plan, subcontracting by Huawei Technology (Thailand) in the provincial area
• AIS, with its 19.5 Million users at 31 December, 2006 , plans to invest 15,000 Million Baht in 3G Mobile and network expansion.
• DTAC, with its12.2 Million users at 31 December, 2006, plans to submit the permission from The National Telecommunication Commission of Thailand (NTC) for 3G mobile, internet business, international call and network development with its 7,600 investment budget in 2007.
• True Move Public Company Limited or TA Orange with its 7.6 Million use numbers at 31 December, 2006. TA plans to expand its services network in 2006-2007 by at least 400 stations, to support its customer base in Bangkok and provinces, with budget of 16,700 Million Baht.
• T&T  plans a 3,000-5,000 Million Baht  investment in ADSL network in 2007-2008

The above investment plans will benefit Demco’s telecommunication projects since it means the increasing demand of telecommunication Towers

Competition

1. Electrical Engineering Business
Due to high demand of  electrical engineering and  increase of Government project investment, as well as expansion in private sector, the company, with 14 years proven experiences in this industry, has more chance to win the projects. The company provides reasonable offer and more confidence to the customers.

2. Electrical system and Machinery Business
To build up a complete service, the company focuses on the Electrical system and Machinery in the industrial plants, especially the Electrical system and Machinery that related to Electrical engineering.      

3. Telecommunication Tower
The Telecommunication service providers’ plans reflected more demand of Telecommunication tower. The company can gain advantages in this competition since we have complete production and service so that we can control production cost and time.