NSM Open to Venture With a Strong Partner

By Busrin Treerapongpichit, Bangkok Post, Thailand

Apr. 18–Nakornthai Strip Mill Plc (NSM), a hot-rolled coil maker, is ready to consider a joint venture with strategic partners if it creates synergies for the company, says chairman Sawasdi Horrungruang.

Mr Sawasdi said that any potential partners would require strengths to bring to the business, which was finally beginning to recover from the prolonged impacts of the economic crisis in 1997.

He said he had approached some steel makers and iron-ore businesses in Eastern Europe about seven months ago for talks to become potential partners.

There have been rumours as well that some listed steel companies in Thailand are targets of acquisitions by foreign investors.

“Thailand is lacking iron ore. If we could join hands with iron-ore operators, it could strengthen our competitiveness,” Mr Sawasdi said.

Apart from the strengths prospective partners could offer, prices must be attractive as well, he said.

The rising price of steel over the past few years has made Thailand’s steel-manufacturing companies more attractive to investors, particularly foreign ones.

Mr Sawasdi noted, however, that since his company had completed restructuring, no solid acquisition plans had been offered to NSM.

He said the company had been approached by numerous foreign investors during the debt restructuring process, as they were looking for opportunities to acquire cheap assets.

“The offers were impossible. They came to shop for very cheap assets in Thailand after we were hard hit by the economic crisis. It was just unacceptable,” he said.

Nakornthai Strip Mill reported a net loss of 720.94 million baht in 2005, compared with a net profit of 583.38 million baht in 2004.

Currently, the company is running its hot-rolled coil production at 800,000 tonnes per year; its full capacity is 1.5 million tonnes annually.

Shares of NSM closed yesterday on the SET at 0.82 baht, up five satang, in heavy trade worth 370.79 million baht.

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