Press Release

Padaeng Turns Profits in 1999

Increases in production and domestic sales of zinc metal as well as significant reduction in operating costs gave Padaeng Industry Plc a 1999 net profit of 179.5 million baht.

February 29, 2000, Padaeng Industry Public Company Limited reported its operational result of 1999 to the Stock Exchange of Thailand that the company posted an unconsolidated net profit of 179.5 million baht, a great improvement from a 1998 net loss of 303 million baht. Its 1999 consolidated net profit also rose to 152.7 million baht from a consolidated net loss of 314.5 million baht a year earlier. The major factors that turned the company into profit were a substantial hike in production and domestic sales of zinc metal, and a decline in operating costs.

The proportion of domestic sales of zinc metal in 1999 rose to 67 percent of its total sales of 96,012 tonnes, compared with 50 percent a year earlier. The other 33 percent of sales were for export. The reason was the recovery of domestic demand, which pushed the local sales in 1999 to rise by 32 percent to 63,982 tonnes.

Meanwhile, Padaeng’s zinc metal production in 1999 rose by 7.4 percent from a year ago to 95,363 tonnes, from which 73,710 tonnes of zinc ingots and 21,653 tonnes of zinc alloy were produced. The alloy output was up 43.6 percent from a year earlier, in line with the company’s policy of increasing the production of value added product.

In 2000, Padaeng plans to produce and sell 97,000 tonnes of zinc metal. Around 70 percent of the production will be sold domestically, while the rest will be exported.The year-on-year rise in domestic sales is expected to come from a projected 5 percent increase in the country’s demand for zinc metal in 2000 at 86,000 tonnes.

In order to reduce production cost as much as possible, Padaeng sets a target to increase utilization of zinc silicate ore resource from the Mae Sot Mine and plans to expand its production for zinc alloy to 26,000 tonnes in 2000.

LME price in 2000 are expected to improve to an average range of $1,100 to $1,150 per tonne due to anticipated rising global demand by 2.4 percent to 8.4 million tonnes in 2000, especially in East Asia, most notably the Republic of Korea, Taiwan, Malaysia and Thailand.