Delta plans $40m outlay for each of next three years

Delta Electronics (Thailand), the country's largest electronics firm by market value, is set to invest up to US$40 million annually over the next three years to expand its global production capacity.

The SET-listed electronics parts maker targets growing its revenue by 10% to $1.3 billion this year after sales fell short of target partly because of the Thai floods.

President Henry Shieh said half of this year's capital expenditure will be invested in Thailand which contributes more than 60% of Delta's revenue, with the rest to be spent on factories in Slovakia and India.

"We will invest aggressively over the next three years to expand our product range, such as wind turbine converters," said Mr Shieh.

He said Delta's revenue grew more than 10% in dollar terms last year to about $1.2 billion, but was still slightly below the original target.

The solar inverter business, which expanded eight times in terms of revenue in 2010, dropped by half from $90 million mainly because of a change in subsidies in Germany and France.

Although it did not directly hit Delta's plants in Bangpoo and Wellgrow industrial estates, the severe flooding last year caused production suspension at two of its suppliers' plants in Ayutthaya.

PCB and Sanyo Electric, a unit of US-based On Semiconductor, saw their plants in Ayutthaya inundated.

Anusorn Muttaraid, Delta's executive director, said the company has to import parts from China as supplies in Thailand have been disrupted. Sanyo earlier decided to relocate production outside Thailand.

The imports have continued to date, resulting in higher production costs, he said.

Delta will focus more on Asian markets, especially India where huge infrastructure projects are being developed.

"Our product mix this year will be different from 2010. We want to make products which are suitable for markets. Consumers these days are not eager about high price products," he said.

At present, power supply products, including power systems for information technology, account for about 40-45% of the company's sales, with 20-25% from the telecoms sector and the rest from industrial and solar power inverters


15 Febuary 2012