The steel-fabrication company is slated to float 156 million or 20.63 per cent of its total shares after launching the initial public offering on the Market for Alternative Investment next month. Tisco Securities is the financial adviser and lead underwriter of the IPO.

As a supplier of steel and module fabrication and erection work to the world’s leading contractors, BTW wants public-company status to gain more trust and confidence from its customers, which include General Electric, Siemens, Mitsubishi Heavy Industries, Hitachi and Marubeni.

“Given the size of our company, we could be listed on the SET, but we consider the MAI to be more suitable to us,” he said, referring to the Stock Exchange of Thailand’s rule for the company to increase paid-up capital of its subsidiaries to be equal to the parent’s, which it considers unnecessary.

BTW’s debt-to-equity ratio was only 0.48:1 as of the end of March.

The company booked a net profit margin of nearly 35 per cent last year when it reported Bt674.8-million net profit on revenue of Bt1.95 billion. During the first three months of this year, however, it reported net profit of Bt19.43 million, down significantly from Bt421.58 million in the same period of last year.

BTW has not conducted a roadshow to present its businesses to institutional or retail investors. “Our share offering is small,” Chotic explained during an interview with The Nation.

According to its IPO prospectus, BTW operates in the same industry as four listed companies, namely STP&I, BJC Heavy Industries, Sriracha Construction, and Unimit Engineering. Nevertheless, the BTW chief said his company stood more on the “two legs” of business-parts fabrication and module fabrication, while its competitors generally depended on one of the two.

The module fabrication and erection business, which hinges on the oil and gas sector, is in a downturn because of the slump in oil prices. Steel fabrication, which depends on power-plant construction, however, continues to be the “bread and butter” business for BTW, he said.

“Our strength lies in the fact that we’re in the power-plant sector, where quality comes before price. Our customers are the global EPC [engineering, procurement and construction] and engineering companies that have 70-80 per cent of power-plant contracts worldwide.”

Chotic said Thailand’s steel-fabrication industry was competitive and generated Bt50 billion in export income annually.

“And unlike assembly industries that import raw materials that account for more than 70 per cent of their costs, this industry has more value-added created locally. In our case, raw materials such as steel account for no more than 35 per cent of our costs. Labour costs represent a similar share, since we use very high-skilled labour,” he said.

According to its official filing, BTW will use its IPO proceeds for investing in additional machinery and equipment, totalling Bt290 million, another Bt160 million for improving its fabrication facilities in Sattahip district, Chon Buri, and the rest for working capital.

Chotic said BTW was also studying the possibility of entering the renewable-energy business, especially plants that run on biomass, wastewater and garbage.

“We have built many power plants. We would have an advantage over our competitors, which are only investors. The business would generate a stable income” as a buffer for the fluctuating construction business, he said.

Among the firm’s backlog are contracts for boilers and other power-plant parts for General Electric’s projects in Myanmar, Pakistan, Canada and Thailand, and for CMI in the United States.