Siam Cement Group pursues growth across Asia

Thailand’s Siam Cement Group is continuing its push for expansion across Asia. In recent weeks, the Group has announced plans to build a 1.8 million t cement plant in Myanmar, at an investment of THB12 billion. The plant is set to become operational by 2018 and will be located at Mawlamyine, which has good access to Yangon by waterway. The Group exported 1.7 million t of cement to Myanmar in FY12, solidifying its position in the market. Total demand in the country was approximately 4 million t in FY12, and this is set to grow by 10% pa over the next 5 years. The plant will include a 40 MW power plant and a 9 MW waste heat recovery plant.

Expanding in India

In India, in a joint venture with Hydrobaths Ramco Marketing Private Limited, SCG is expected to establish a facility to manufacture Smartboard fibre cement sheets and Smartwood fibre cement based wood alternatives. The new facility would only be considered once Indian sales of the boards, which are marketed via SCG’s JV partner, reach 1 million m2 pa.

ASEAN focus

Meanwhile, Kan Trakulhoon, SCG’s president and CEO, has told The Nation that it will continue to pursue its investments in the ASEAN region despite signs of an economic slowdown. “Look at Indonesia,” he said, “Even amid economic troubles, the growth rate will be at least 5% this year.” SCG has announced an investment of THB18 billion in the cement industry in Indonesia and Cambodia under the ‘go regional’ concept. Having been badly hit by the financial crisis in the 1990s, SCG redefined its business strategy to focus on five business areas (down from ten) and to expand in Asia, particularly ASEAN. Under this model, the company would first export products from Thailand to its target market, then establish a dealer network, and only consider setting up a new plant when the sales volume reached a sufficient level. This business model has been followed in Cambodia and Vietnam, with success.

“It’s vital to start by understanding market preferences,” Kan told The Nation. “We’re good at making quality products, and some are overqualified. Yet we also need deep understanding of market demands.” He added that SCG’s business model insists that it should hold a majority stake in all ventures.

Siam Cement Group is committed to project investments of THB40 – 50 billion pa over the next few years.

Edited from various sources by Katherine Guenioui