Farm machinery maker Siam Kubota Corporation (SKC) is upbeat on sales of construction equipment, predicting a 25% rise in sales of its mini-excavators to 2,000 units this year.
Senior executive vice president Opart Dhanvarjor said public and private sector construction projects are the key factors driving demand for new machinery.
He forecasts the mini-excavator market -- those smaller than eight tonnes -- will grow by 20% in 2017 from 6,000 units in 2016. New excavators account for 45% of the total market.
"Government investment in construction projects continued to grow as a result of the country's infrastructure development plan, particularly transportation systems such as mass rapid transit and roads connecting neighbouring countries," said Mr Opart. "Moreover, construction machinery has long-term value as it can replace human workers at times when the country is facing labour shortages."
SKC has been keen on the construction sector since 2008, when it began importing mini-excavators from Hirakawa, Japan, where parent firm Kubota Corporation is able to manufacture 34,000 units per year.
Last year, SKC sold 1,600 mini-excavators in Thailand.
Kubota controls 70% of the mini-excavator market in Thailand, which has many players, including Japanese rivals Yanmar, Komatsu, Hitachi and Kobelco, as well as Volvo from Sweden and JCB from the US.
But Kubota construction equipment represents just 5% of SKC's revenue. Agriculture machinery is the firm's main business.
Founded in 2010, SKC is a 60-40 joint venture between Kubota Corporation and Siam Cement Group.
SKC operates factories in Nava Nakorn Industrial Park and Chon Buri's Amata Nakorn Industrial Estate, with annual production of 240,000 and 80,000 units, respectively.
The Nava Nakorn factory normally produces diesel engines and power tillers, and also serves as the site for Kubota's parts distribution centre and R&D hub for Asean. Tractors and combine harvesters are made at the Amata Nakorn facility.
SKC has 74 dealers running over 200 branches nationwide.
Mr Opart said the company is confident in achieving annual sales growth of 10%, compared with 50 billion baht last year.
"2017 is a better year for the agricultural sector because there is no drought and farm-product prices are increasing," he said, adding that the market value of farm machinery will grow to 40-50 billion baht this year.