Swiss group ABB targets 10% growth

ARANEE JAIIMSIN

ABB Ltd, the Swiss-based power and automation technology provider, continues to see Thailand as a promising country in the region and aims to increase its annual sales revenue here by at least 10%, according to president Fred Kindle. ''Thailand has the potential to grow 6% in the longer term. The only question now is when it will happen again?'' said Mr Kindle, who is also the chief executive.

Increasing private consumption and positive thinking about the country's future would help the company realise its goal, he said.

ABB's global sales revenue increased by 20% to US$26 billion last year, double its growth rate in Thailand.

''We continue to do that (maintaining a growth rate at 10% per year),'' said Mr Kindle.

Despite the bid for independent power producer (IPP) projects scheduled for late this year and the steady expansion of the petrochemical and automotive industries, it is difficult to predict the growth rate of ABB's business in Thailand next year, said Mr Kindle.

The main reason for the uncertainty is the fact that the company's growth in Thailand depends not only on domestic growth rates, but also opportunities in neighbouring countries, including Laos and Cambodia, which are under the supervision of ABB's Thai operation.

He said ABB's head office in Zurich was very decisive about its business development in Laos and Cambodia.

Currently, ABB provides Siam Cement Group with technological support for its petrochemical project in southern Vietnam as well, said Mr Kindle.

''Thailand will continue to be ABB's hub in the region because Bangkok is very competitive (in terms of the business environment).''

Chaiyot Piyawannarat, president and country manager for ABB in Thailand, Laos and Cambodia, said Cambodia utilised 300 megawatts of electricity now and consumption would expand by 10-15% in the future as a result of a rapid increase in the number of real-estate development projects and the planned IPP development programme.

ABB business in Laos is also expanding because Vientiane plans more hydropower plants, said Mr Chaiyot.

Nevertheless, the combined sales revenue in Laos and Cambodia is less than 10% of ABB's turnover from its operation in Thailand at present.

ABB has divested non-core businesses such as transport and insurance in order to focus on its strengths in power and automation since the late 1990s.

After selling its upstream oil-and-gas companies, including Vetco Gray in 2004, it expects to complete the sale of its downstream oil-and-gas business, Lummus Global, this year.

Mr Kindle said ABB's divestment policy would not have a significant impact on overall financial performance because the challenge of ABB's business today did not lie in restructuring but rather in how to sustain its growth rate.