SCG chief calls for more intra-ASEAN investment, FDI

Kan Trakulhoon, president and chief executive officer of Siam Cement Group (SCG), also assured investors during the Asean Business and Investment Summit in Bali, held as part of the Asean Summit, that the worst flooding in 50 years would not get in the way of Thailand’s integration with Asean.
He said SCG was committed to investing in Thailand and other Asean countries.
Kan, one of the guest speakers, said during a seminar titled “Setting the Scene: Re-envisioning the 21st Century Global Economic Architecture” that after the 2008 global financial crisis, Asean has proved that the region is capable of rapid economic recovery. He said Asean would lead the global economy in the future. Hence all Asean members should accelerate integration, combining the strengths of each country for the highest benefit.
“This is the time for Asean to grow, not Europe or any other region,” Kan said.
He said Asean countries still had a higher young population than Europe or some developed countries such as Japan. About 90 per cent of the new population by 2050 will come from emerging economies. Besides, the fragile economy in Europe will offer an opportunity for Asian companies to acquire assets.
The integration of Asean members is one of the important issues to be discussed during the Asean Summit in Bali as the region prepares for a common community under the AEC by 2015.
Kan said that to benefit from the AEC, Asean countries should open up for FDI with more emphasis on intra-region investment. He said investment among Asean countries was still small. In 2010, total investment value in this region was US$2 trillion (Bt65 trillion), of which only 35 per cent came from Asean countries themselves, whereas most of the money was from European countries. China and India over the past five to 10 years have attracted much more FDI. At this time, Asean should attract investments from outside the region, he said.
“The faster we open our countries for FDI, the faster we will benefit from the integration. Truly speaking, I wouldn’t be concerned whether foreign investors choose to invest in Thailand or not. I’d still be happy if they choose any location in Asean. This should be the spirit of Asean countries,” he said.

$5 BN BUDGET
Kan said SCG would invest both in its home country and other Asean members. The company’s board of directors has reiterated a five-year investment budget of $5 billion for the period 2012-16. Real spending is likely to exceed the company’s projections as SCG is gearing up to acquire new assets in many Asean countries. Petrochemicals, cement, and building materials are in its focus.
About 80 per cent of SCG’s investment used to be in Thailand, while 20 per cent was mergers and acquisitions.
The situation has changed now, as roughly 75 per cent of the five-year investment budget will be allocated for M&A deals. However, its businesses in Thailand remain bigger than those in Asean, Kan added.
About 12 per cent of SCG’s assets now are in Asean. It aims to increase the proportion to 20 per cent over the next five years.