Thailand’s electric furnace steel industry produce 6 million tons of crude steel annually, with 60% of the raw material coming from domestic scrap. A local scrap dealer, Angprapha Steel (Samut Sakhon Province), supports domestic steel production by taking advantage of its handling of factory-generated scrap. We recently interviewed to the company’s Vice President Angpraphapornchai Chayaporn about the current business environment and future challenges.
Q1 First, an overview of the business.
“My father (CEO Angpraphapornchai Chadhin) founded the company in 2003, and this year marks its 21st year. We have three bases: the head office yard, the Pinthong branch (in Chonburi province), and the Krok sombun branch (in Prachinburi province) which has the largest site. We handle 10,000 to 20,000 tons per month and the head office yard alone handles 7,000 tons. The scraps are mainly iron, but also stainless steel and non-ferrous metals. We used to only handle iron scrap but have gradually increased the variety. Each of our bases is located next to an industrial park, and 90% of the volume handled is generated at plants of home appliance and automobile manufacturers. We placed a collection box at the generating factory and picked it up. In addition, we also purchase demolition scraps from around the city. 90% of our scrap is to domestic electric furnace manufacturers and foundry manufacturers and export the rest of it. Since Thailand is basically an importer of scrap, it is not in an environment where it can actively export it, so the company sells mainly domestically. In addition to scrap, we also handle second-grade steel materials, and sell 300 to 400 tons domestically.”
Q2 About equipment and quality control.
“We have shears in two yards including head office, and 700-horsepower shredder and alligator shears. Regarding quality assurance, we attach cameras to each truck and constantly monitor them from our headquarters, and constantly check to make sure there is contamination or not. Regarding the maintenance of truck scales, the law requires an inspection once every two years, but we do them every year to ensure there are no errors in quantity. We use a handy analyzer to check the type and dissimilar metals and use an excavator to check what is inside each time. Regarding certification, we have obtained and comply with ISO 9001/14001.”
Q3 Current scrap generation and sales situation.
“Due to the economic downturn, the generation of scrap is decreasing in almost all fields. Competition with other companies in the same industry for collection is fierce. However, the generation of tin cans which are used for canned goods containers is steady. It depends on the situation, basically the sale of our scrap isn’t enough for domestic demand. Ad about sales, my father has been in scrap market for 40 years. So, we have built good relationships with domestic companies, and trade with a wide range of customers, rather than only one company. We also export second-class products. But high tax occurs when exporting from Thailand, so it depends on the price. We would rather sell more domestically because we want to take care of our regular customers. ”
Q4 Challenges and future developments.
“Thinking about the low amount of scrap produced and the fierce competition for collection, the challenge is to acquire and expand new sources. We have handled non-ferrous scrap. But for stabilizing our business, we are considering expanding our scrap lineup. I feel that it is necessary to meet domestic demand. We would like to increase the amount of scrap, both ferrous and non-ferrous. In terms of investment, we are constructing a new office in our head office yard, which will be completed by the end of the year, and we look forward to unveiling it our customers.” (Writer=Eisaku Ishibashi)