Siam Cement PCL, Thailand’s largest industrial conglomerate, aims to boost cement production and sales in Southeast Asia to offset a slowdown at home where political unrest has delayed spending on infrastructure projects.
Siam Cement, which also produces chemicals and paper, has been building cement factories in the fast-emerging economies of Cambodia, Indonesia and Myanmar where an infrastructure bonanza has pushed up demand for construction materials.
At home in Thailand, sales have slowed because of a decline in rebuilding demand after widespread flooding in 2011, and have been exacerbated by the prospect of clashes between supporters of the prime minister and protesters who allege corruption.
Siam Cement projects domestic cement demand growth of 2 percent to 3 percent this year, from 7 percent last year. That compares with projected annual growth across the Association of Southeast Asian Nations (ASEAN) of 7 percent to 8 percent.
“If political crisis is prolonged, Thai cement demand is likely to be negative,” Chief Executive Kan Trakulhoon said at the Reuters ASEAN Summit.
“ASEAN will be a growth platform for the world economy. Its attractiveness has increased significantly after Myanmar was included,” Kan said at the summit.
Myanmar is emerging from decades of military rule and isolating sanctions and has been looking to attract foreign investment since a quasi-civilian government took office in 2011. This year, the country is chairing ASEAN for the first time.
Siam Cement’s ASEAN assets reached $2.2 billion last year, or 16 percent of the total from 5 percent in 2008. The company aims for ASEAN sales to reach 30 percent from 20 percent by 2018, Kan said.
ASEAN is made up of Thailand and the hosts of its three new factories, plus Brunei, Laos, Malaysia, the Philippines, Singapore and Vietnam.
Siam Cement aims to begin production at the new factories over the next two years, raising overall capacity by 20 percent from 24 million tonnes now, Kan said.
The company then plans to double capacity in Indonesia and Myanmar within five years of beginning production, Kan said.
Siam Cement is a century old and 30 percent owned by the Thai royal family’s Crown Property Bureau investment arm.
The company is ASEAN’s second-largest cement maker by capacity after Swiss Holcim Ltd, and is the region’s biggest producer of downstream chemicals for plastics. Reuters