Conditions of Industry

The zinc industry saw a recovery in 2003,following improved world economic conditions, despite the slow start in the first quarter due to the war in Iraq and the SARS epidemic, once these extend factors were resolved, many industrial sectors rallied, causing a rise in demand for zinc metal in downstream industries as well. Total world consumption of zinc metal in 2003 equaled 9.60 million mt, an increased of 2.5% from the previous year, this rise is attributed to the increased demand in Europe and Asia, particularly in China where demand grew higher than any other country. Total production of zinc metal stood at 9.79 million mt, up to 0.7% from the prior year, resulting in a slight boost in world zinc price, which average US$ 828 for the years, compared to US$ 779 in 2002 or an increase of 6.29% As of the end of 2003 LME world zinc stocks totaled 740,400 mt, an increase of 89,350 mt from last year.

Domestic demand for zinc metal grew a slight 1.1% to 112,723 mt, as the country’s economic recovery continued consumption of zinc metal was evident in primary industries including the galvanizing sector, die-casting, zinc oxide, brass and battery.

Zinc Metal Sales Volume
The company’s overall sales of zinc metal for 2003 totaled 113,941 mt, valued at Baht 4,543 million. Domestic sales equaled 90,639 mt, while exports accounted for 23,302 mt, or 80% and 20% of total sales respectively, compared to the previous year, domestic sales rose 5% and exports jumped 16%. Important export markets include China, Vietnam and ASEAN countries. Furthermore, the company reduced the amount of zinc ingot exported and instead focused marketing on exporting zinc alloy since these valued-added products have higher profit margins.

Competition in the Industry
Since the level of demand for zinc metal in the world, market grew only slightly during 2003, competitiveness within industry remained just similar to the year before. Smelters in Australia,Korea and China continue to be our main competitors in the region. Nevertheless, through implementation of marketing strategies, including building confidence in our product quality and providing expert technical support and other services, the company has been able to maintain its position in the market. Furthermore, the company is committed to upholding the quality of its products, which comply to international standards and meet with customer’s requirements, while conducting business operations in line with the quality system of ISO 9001 and developing differences types of products to better respond to needs of certain customer groups. In addition, the company provides support and advice in solving technical problem and recommendations on how to best utilize zinc metal, while ensures shipments are delivered to customers on a timely basis so as to reduce their inventory burden. The company also organizes training programs and seminars to promote awareness and knowledge of the benefits of zinc metal for related parties in both the public and private sectors in order to encourage more and useful usage of zinc metal.

FIGURE 1: ZINC LME PRICES AND STOCK LEVELS DURING THE PAST 10 YEARS FROM 1994 – 2003

FIGURE 2: ZINC CONSUMPTION IN THAILAND FROM 1999 – 2003

FIGURE 3: SALES VOLUME OF ZINC METAL AND ALLOYS FROM 1999 – 2003

FIGURE 4: SALES VALUE OF ZINC METAL AND ALLOYS FROM 1999 – 2003

FIGURE 5: SALES VOLUME OF ZINC METAL FROM 1999 – 2003