SCG plays down impact, assures prompt market supplies

Affected SCG-affiliated operations include Siam Kubota, Quality Construction Products (Q-Con) and Siam Sanitary Fittings, the manufacturer of Cotto faucets.
Meanwhile, the group says it can distribute building materials and cement to the market promptly without disruption or shortages. It might offer building materials at discount prices to relieve flood victims.
President and chief executive officer Kan Trakulhoon said the company’s affected producers accounted for only 2-3 per cent of total operations. Some plants manufacturing building materials and paper in Saraburi province and other locations cannot operate because of logistics disruption. In addition, their sites are full of inventory as they cannot distribute the products.
Q-Con has suspended production in Bang Pa-in Industrial Estate since October 12. Thai Containers Group in Nava Nakorn Industrial Estate halted operations on Tuesday. Siam Sanitary Fittings, Siam Kubota Corp, Thai Engineering Products, and Musashi Auto Parts, which are the plants of associated companies, have also been suspended.
Some subsidiaries have had to cease production because of a shortage of raw materials and transport disruption. These are The Siam Fibre-Cement in Ta Luang, Saraburi province, The Fibre-Cement Products (Lampang), and The Siam Cement (Ta Luang) in Saraburi. All the damaged operations are covered by insurance.
SCG has a joint venture with Kubota in Nava Nakorn Industrial Estate. The company holds a 67.62-per-cent stake in Q-Con.
“The impact to SCG is expected to be very minimal, as the affected productions account for only 2-3 per cent. The other operations that have had to shut down operations temporarily can resume production immediately once the floods are gone. So we are still confident that the company’s revenue this year will experience growth,” Kan said.
He said the company was evaluating whether cement demand can keep growing after this year. Cement sales volume rose by 3 per cent in the first half of this year compared with the same period last year, but that number is expected to drop in the current final quarter. Sales volume in the third quarter was not affected by the floods. SCG also cannot export cement as the floods have affected the ports.
SCG estimates that cement consumption will pick up in either the second half of the current quarter or the first quarter of next year, but it cannot say by how much. The same is true for its building-material products.
Kan added that to distribute it products promptly, besides its distribution centres and authorised dealers, the company was ready to lease warehouses to stock building materials for distribution.
“We are also considering offering discounts for cement and building materials so as to help relieve the cost for consumers,” he said.
Kan said the company had allocated Bt200 million to help people affected by the floods. SCG also donated 2 million bags of ground limestone to compensate for the shortage of sandbags. The company is building floating and mobile restrooms to deliver to people in flood-hit areas.
SCG will provide about 100 engineers to advise consumers on how to repair their flood-damaged homes.