Siam Cement Group (SCG), Thailand's top industrial conglomerate, has announced plans to spend 30 billion baht (US$991 million) over a five-year period, to lift its cement production capacity from the current 1 million tpa to 6 million tpa in the ASEAN markets outside of Thailand.
The company’s president Pramote Techasupatkul, recently said the company had researched the possibility of cement production in Vietnam in addition to building a new factory in Indonesia and a second unit of at its Kampot plant in Cambodia. The group has similarly considered opportunities in Burma's Dawei district and is eager to invest in a cement plant once the military government permits more foreign investors.
"Within five years, we are going to have 6 million tpa of production capacity in neighbouring countries. At present, we have only 1 million tpa at the Kampot plant," Techasupatkul noted.
The southern region of Vietnam is the company’s target, as this is where the cement demand is high, while raw materials are plentiful in the northern and central parts of the country. Techasupatkul commented that the company is “also looking at merger and acquisition opportunities in Vietnam, in addition to investing in a Greenfield plant.”
A third of the total planned budget has been set aside to build a 2 million tpa capacity cement plant on the Indonesian island of Java. "Of course, we have a concern about earthquakes and tsunamis on the Indonesian island so we will cautiously study the potential locations over the next six months in order to avoid any risky areas," Techasupatkul added.
SCG has an overall cement output of 23 million tpa in Thailand, and expects 80 – 85% to be utilised this year, including 7 million t of exports. The domestic sales are anticipated to rise by 5% from 12 million t in 2010, generating nearly 50 billion baht in revenue.
SCG has announced that 30% of the five-year investment plan will be spent to expand the capacity of ready-mixed mortar cement in Thailand by 40% to 3 million t.
Additionally, there are plans for Siam Fiber Cement Co, a subsidiary of SCG Building Materials to construct its fifth plant in Nong Khae, Thailand, as the demand for environmentally friendly fibre cement continues to grow. "We are confident that the market will continue to expand significantly and our focus remains on innovative products that are good for preserving the environment," the managing director, Panthep Supachaiyakit said, adding that sales were expected to expand by 8 – 10% this year. The new plant is expected to be operational in early 2013.
Siam Cement shares (SCC) closed yesterday on the Stock Exchange of Thailand at 353 baht, the highest close since at least 1990.