SCG eyes full-year growth despite Q4 declines

"Because of lower sales in every business unit, we expect SCG’s overall sales in the final quarter to drop by 10-15 per cent, but total sales this year are likely to reach Bt360 billion for 20-per-cent growth," Kan Trakulhoon, president and chief executive officer of SCG, said yesterday.

The company also expects cement consumption this year to show flat growth or a slight dip, but to swing back next year and accelerate beyond 5 per cent annually over the next few years from the usual 3-5 per cent. Cement will be in huge demand to rehabilitate residences, buildings, infrastructure such as roads, plants and industrial estates, he said.

SCG expects sales to decline 10-15 per cent this quarter from Bt78 billion in the final quarter of last year, but its sales during the first three quarters were very good, up 25 per cent to Bt280.64 billion.

Sales of SCG’s core businesses such as cement, paper and chemicals are declining. The company expects the sales volume and value for cement this quarter to fall by 10-15 per cent from the normal level.

Orders for paper products have plunged by 20-25 per cent for a few weeks, as customers in the food and electronics industries cannot run their factories. The disruption to the operations of its customers in the plastics industry has hurt sales of petrochemical products. Sales in the petrochemical business have slipped by 15-20 per cent.

Kan estimates the overall flood damage at more than Bt100 billion. All damaged homes, buildings, factories, industrial estates and infrastructure need to be reconstructed or restored. Demand for cement and building materials will be higher than normal for the next few years. Cement demand will be 5 per cent higher than the present figure of between 28 million and 29 million tonnes.

Despite good prices for cement exports, SCG cannot shift to exporting more as the high flood waters have obstructed shipping at the port. The price of cement exported to the world market has soared to US$46 per tonne from $41 last year.

SCG yesterday released its third-quarter operating results. Net profit rose 13 per cent year on year to Bt7.37 billion, helped by the divestment of about 2 per cent of its remaining shares in PTT Chemical. Now, its stake in this company is about 2 per cent.

SCG has prepared a plan to move its head office to Pattaya in case its headquarters in Bangkok’s Bang Sue district is submerged, to ensure that the floods will not interfere with its business. As well, the transport of cement and building materials will run smoothly, he added.

Chaovalit Ekabut, vice president for finance and investment and chief financial officer, said the company had just resumed production at The Cement Products (Lampang) and The Siam Cement (Ta Luang). Other subsidiaries and affiliated companies such as Siam Kubota, Siam Sanitary Fittings and Q-Construction Products have halted production.