KCE Electronics 95%, KCE Technology 90% and KCE International 87% The utilization rate is based on available capacity for a number of working days in each month.
Current PCB production capacity is as follows:
|KCE Electronics PCL||550,000 sq.ft./month|
|KCE International||450,000 sq.ft./month|
|KCE Technology||900,000 sq.ft./month|
In 2010, KCE set a CAPEX of Baht 200 million for machine replacement and modification/upgrading of existing machines to improve efficiency, so that the capacity increased from 1.9 million sq.ft. to 2.1 million sq.ft. per month. The increased capacity will be seen in Q1-Q2 2011.
A new factory depends on new customer growth in the year ahead. The issue will be assessed in Q4 2011, and it takes 12-18 months for the new plant to start production.
In 2011, the worldwide PCB industry is expected to grow 5-6%, while PCB for the Auto sector could grow by more than 10% because of the increase in hybrid cars, despite there being only a 3-5% growth in the Auto industry.
There was no effect in the first half of 2010, and there has not been a decline in Q3-Q4 orders from European customers.
Copper is the main raw material, representing 10-13% to product price. The price of copper increased during Q1 2010, but came down towards the end of Q2 2010. It is forecasted that the copper price will not be highly fluctuated during the second half of 2010. KCE has hedged the price of copper for 50-70% of total copper requirements for the group's production. Base on a rough estimate, every LME price change of US$ 1,000/Ton, the net effect to cost is nearly 1%.
CAPEX for 2010 is set at Baht 200 million, most of which is sourced by debt financing (long-term borrowing).
Sales projection for 2010 is US$ 240 million, and an increase of 15-20% in 2011 is expected. The GP rate for 1H 2010 was at 23% and a 2-3% improvement is likely to be achieved due to lower material costs and full capacity utilization in all factories.
Recently, the scrap rate has been as low as 5%. In general, scrap depends on the quality of raw material, the complexity of the product being manufactured, the technology required, the condition of the machines, the worker's skill and other issues, and not simply on volume processed. Therefore, a new product or increasing sales volume does not necessarily mean a higher scrap rate.
Sales are mainly in two currencies, 75% in USD and 20% in Euro, while cost is 50% in USD. The net exposure of 25% for US dollar, in typical situations, will be net off with Euro risk. However, the company's policy is to hedge foreign exchange rate risk at 50-60% of the net position and base on market expectation.
Sales by industry are as follows:
(Telecom, Computer & Network, Consumers, Metering and others)
Growth in the Automotive sector should be minimal, while there could be up to a 5% increase in the Consumers sector, as previously targeted.
Product cost can be broken down into the following elements:
Lower than 2 times by the end of 2010.