Tipco Asphalt's 50-per-cent-owned asphalt plant in Malaysia is nearly complete and production is expected to begin in February or March. The plant has an annual capacity of 700,000 tonnes, of which half will be used by Tipco.

The Malaysian asphalt company, Kemaman Bitumen, is a joint venture between Seloga Holding Berhad of Malaysia (50 per cent), Tipco Asphalt (40 per cent) and Thai Bitumen (10 per cent), which is a Tipco Asphalt subsidiary.

By-products are petroleum gas and high-sulphur fuel oil, which can be sold to end-users. The new plant is expected to boost Tipco's exports next year as a new source of raw materials with higher margins.

The brokerage expects fourth-quarter earnings to soften quarter on quarter as widespread flooding in October and November will limit delivery opportunities.

However, Tipco should benefit from an increase in road repairs next year caused by the recent flooding, but product prices are expected to fall in line with lower production costs.

The brokerage projects a 37-per-cent rise in net profit next year to Bt368 million on the back of stronger margins and no repeat of this year's foreign loss of Bt62 million. However, the projection does not include the Malaysian operation.