QTC Energy Plc, which listed on the Market for Alternative Investment in July 2011, manufactures and distributes electrical transformer equipment and provides related services. Poonphiphat Tantanasin, chief executive and managing director, discusses the company's strategy and outlook.
What is QTC's business model?
QTC makes and distributes custom-made transformers for both the domestic and export markets. We provide three types — distribution transformers that range from 30 to 5,000 kilovolt-amperes, small power transformers from 5-30 megavolt-amperes and special transformers for indoor and restricted areas. Today, we are able to manufacture 3,000 to 4,000 units a year. We also provide installation, maintenance, testing and consultancy.
Poonphiphat: Powering up transformer business
Our domestic customers are in both the public and the private sectors. Because Thailand's power industry, specifically alternative energy, has grown significantly, we have been obtaining more clients in the private sector. Our largest export market is Australia, followed by Southeast Asia, Europe and the rest of the world. We are quite proud that recently we have begun original-equipment manufacturing for a well-known Japanese brand, which signifies the quality of our processes and products.
QTC's business has grown strongly over the past 10 years. What are the main reasons for this?
It is a combination of growing our own research and development to improve the quality of our products and working closely with our partners. Our company philosophy is DETAILS: Dyanmics, Environment, Teamwork, Achievement, Innovation, Leadership and Service. It is our philosophy to ensure we are able to grow continuously with our own key performance indicators and improving our team.
We intend to be a world-class company for transformers and have worked hard at receiving international certifications. Today we have the TSI 384-2543 from the Thai Industrial Standards Institute and ISO 90001:2000 for design, production and maintenance of distribution transformers. The company has been certified for testing laboratory capacity in compliance with the TSI 17025-2548 (ISO/IEC 17025:2005) standards. All of this has proven to international customers that we are able to deliver quality transformers that meet international standards.
We have only 200 employees and so are smaller than our competitors, but we have the largest market share in Thailand because we understand that people are our assets and that our product quality has to be equivalent to that of Japanese and European firms while still being cost-effective.
QTC has announced its intentions to invest in alternative energy projects. How is this progressing?
We have been planning for this since we listed on the stock exchange and are continually looking for opportunities in solar, biomass and so forth in Thailand with capable partners where we can apply our knowledge of electrical equipment. We hope to conclude an investment this year, thereby providing QTC with a steady income stream.
How do you view demand for transformers in Thailand and the region?
Under the Power Development Plan from 2010-30 for Thailand, maximum electricity demand is forecast to increase from 23,249 megawatts in 2010 to 52,890 MW by 2030 or average annual growth of 4.42%, while electricity generating capacity will increase from 31,349 MW to 65,547 MW or an average of 3.96%, so we will naturally grow with the market here.
Thailand currently consumes the same amount of electricity as Malaysia and Singapore despite its larger population size. Japan consumes 200,000 MW and the US between 250,000 and 300,000 MW, so when you look at the industry from this viewpoint, there is still a huge market opportunity available in Thailand and its neighbouring countries.
What are the biggest risks facing your business?
Politics is a risk, as part of our business is derived from the public sector. When there are changes in government, projects and spending are delayed and we are affected, as seen by our first-half performance last year. We must also consider our future, as once we have expanded our capacity to achieve 1.5 billion baht in revenue, we have to consider how to invest further in the future of our people and systems.
What impact will the Asean Economic Community have on your business?
This should increase the market potential for QTC. However, we cannot focus on more developed countries such as Malaysia or Singapore, but when you look at electricity generation versus population, then the opportunities that exist for the other eight Asean members including Thailand are still enormous. That is why we are confident in our long-term future.
Where do you see QTC in five years?
Our goal is to continue to be the market leader in Thailand and develop additional businesses that allow us to have multiple revenue streams to improve the stability of our total revenue. We will continue to improve ourselves in all aspects for our customers by improving our products further so that our quality will be considered equivalent to that of German manufacturers.
The Executive Q&A Series is presented by ShareInvestor, Asia's leading financial internet media and technology company and the largest investor relations network in the region, with more than 500 listed clients. This interview was conducted by ShareInvestor. For more information, e-mail admin.th@shareinvestor.com or visit ShareInvestorThailand.com