October 25, 2018 / 5:18 AM / 21 days ago

Thailand's KCE Electronics cuts 2018 sales growth target by half

BANGKOK, Oct 25 (Reuters) - Thailand’s KCE Electronics Pcl , Southeast Asia’s biggest maker of printed circuit boards (PCBs), has cut its sales growth target in dollar terms this year to 7 percent from 12-15 percent earlier, its chief executive officer said on Thursday.

The target cut was due to production bottlenecks and a slowdown in the European automobile market following the worldwide harmonised light vehicle test procedure (WLTP) laboratory test, Pitharn Ongkosit told Reuters in an interview.

“We were unable to ramp up business to meet customers’ needs in the first half, but that has improved,” he said. “Still, there is the WLTP problem, though it’s not a long-term one.”

However, KCE expects sales to grow 12-15 percent next year as the production problem has now been fixed and the European auto market is expected to return to normal, Pitharn said.

In 2017, sales rose 6.7 percent to $420 million on strong demand for PCBs, particularly from the automobile industry.

PCBs are key components in electronic products in the automobile, electrical appliance and telecommunications industries.

KCE exports 45-50 percent of its products to Europe, about 15 percent to China and about 10 percent to the United States.

Global carmakers are its main customers, along with companies such as Siemens and Sony Corp.

The firm has not been affected by the Sino-U.S. trade dispute as its exports to China are used locally, while it expects to sell more to the U.S. market, Pitharn said.

KCE has total production capacity of 3.35 million square feet per month and plans to increase that to 4.05 million by the end of 2019.

It also plans to spend 4.6 billion baht ($139.82 million) on a new factory in Bangkok, as part of a longer term goal to boost sales to $1 billion over the next five years. ($1 = 32.90 baht) (Reporting by Satawasin Staporncharnchai Writing by Orathai Sriring Editing by Sunil Nair)

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