INTEGRITY QUALITY SERVICE - Saha-Union Co., Ltd

SAHA-UNION
05
12 million bottles/year in order to support a growing market
in the new economic countries. The plastic group producing
electric appliances and automobile parts generated less
revenue than the previous year due to Japan’s natural
disaster in the 2nd quarter and the massive flood in the 4 th
quarter, which dramatically affected the automobile industry
in particular, bringing down the production because there
was a shortage in auto parts. In the 1st and the 3 rd quarter,
however, the operating result was satisfying. Therefore, it is
expected that automobile factories could resume their full
production capacity after the flood receded. The production
will be ramped up to compensate the missing productivity.
There was a fluctuation in rubber price, which soared up
in the beginning of the year and came down at the end
because of a decreasing demand from China. This incident
was advantageous to rubber plantations and block rubber
plants, but those using rubber as a raw material such as
rubber thread and adhesive tape factories had to face rising
costs of rubber and chemical products, contradicting with the
domestic and international market where sales decreased.
As for the group of textile, clothing and accessories, which
is an export-oriented segment, the operating result was
good from the beginning of the year, when both purchasing
orders and prices increased. From the 3rd quarter onwards,
purchasing orders continuingly fell in accordance with the
economy of partners’ countries in Europe and the USA.
Moreover, the price of cotton, a crucial raw material, radically
fluctuated and affected the production cost. Under this
circumstance, revenue and cost management was very
difficult. This uncertainty was expected to continue until
2012.
The business of natural gas power plant in Ratchaburi named
Ratchaburi Power Co., Ltd., in which the Company held 10%
of the shares, has been operating commercially for 4 years
and generated good investment returns as expected. As for
the energy business in China, the performance was affected
because the coal prices increased while the electricity
prices could not be adjusted accordingly. Moreover, the
environmental cost also increased; therefore, the Chinese
electricity business had a lower operating profit than the
previous year. In 2011 the Company decided to sell the
power plant ‘Wuxi-Union Cogeneration Co., Ltd.’ to major
shareholders from China because the city of Wuxi were
expanding and there was a policy to remove the factories
located outside the industrial estates from the urban
area. The location of Wuxi-Union power plant was in the
range of the town expansion. Many important customers
of the Company had to move out, and Wuxi-Union power
plant used coal as fuel, causing pollution in the nearby
communities; therefore, the authority had a policy to relocate
the power plant to the new area, otherwise the plant had
to use natural gas instead of coal. Having considered the
option, the Company saw that the power plant could not
operate its normal business unless a high cost investment
was made to relocate the plant or to replace the production
system as specified by the government. The return of such
an investment would not be worth the cost, so the Company
agreed to sell its property.
Moreover, the Board of Directors of the joint venture company,
Yunnan Energy Qujing-Union Power Co., Ltd. had a resolution to
cease the operation because its chronic operation loss started
to cause the liquidity problem, which barred the operation and
might pose financial burden upon the shareholders.
In 2011, the operating results of Saha-Union Public
Company Limited, according to the separate financial
statements, showed the total revenues of Baht 2,910 million,
Baht 1,824 million of which was from sales and service
and Baht 1,086 million from other income, decreased by
Baht 1,397 million from 2010. The Company’s net profit
was Baht 760 million, a Baht 548 million decrease from the
previous year. When considering the consolidated financial
statements, the Company had the total revenues of Baht
9,889 million, decreased by Baht 1,679 million from the
year before; and the net profits of the major shareholders
of Baht 738 million, a Baht 1,075 million decrease from the
previous year. As of the end of 2011, the Company had
the total liabilities amounting to Baht 665 million and the
shareholder’s equity amounting to Baht 11,518 million, with
the ratio of liabilities to shareholder’s equity of 0.057:1, when
compared to the 2010’s ratio at 0.127:1, indicating more
stability of the Company’s financial status.
The Board of Directors would like extend our thanks to the
management team and all employees for their commitment
to delivering their best efforts in their duties, especially in
time of crises, for the Company to achieve its good operating
results, stability and prosperity. We also would like to
thank our shareholders, business partners and all related
parties for their kind support. We are determined to run the
businesses with good corporate social responsibility (CSR)
for the benefit of stakeholders and the society; to manage
the Company with integrity, care, and consideration; and to
develop the businesses to achieve stability of investment,
good returns and creates the maximum benefits of all
shareholders and the society.