Drivers behind SCG Trading
SCG Trading, a unit of Siam Cement Group, targets annual sales growth of 30 per cent from this year onwards, driven by coal and building-materials business, particularly overseas.
Managing director Kalin Sarasin said the company was accelerating investment and expansion in both coal and building-materials trading in Asia, as they were both fast-growing sectors in the region.
The demand for coal is increasing after the nuclear disaster in Japan last year, as it is a major alternative to nuclear fuel for generating electricity. Meanwhile, developing countries in Southeast Asia, namely Burma, Laos, Vietnam, Cambodia, Indonesia and the Philippines, have huge demand for building materials. These are both good factors for driving SCG Trading’s growth, he said.
Regarding coal trading, the company plans to invest in stockpile locations in China and India, both major consumers of the fuel. It will also add a screening plant in Vietnam next year to the company’s existing coal stockpile in that country.
In Thailand, SCG Trading is investing in a coal-stockpile site and screening plant in Thung Song district in Nakhon Si Thammarat province. Operations will commence soon. The coal stock at the new site will serve SCG’s cement plant in the district and other industries in the southern part of the country. The screening plant in Thung Song will have a capacity of 5,000-8,000 tonnes per month.
The company has also had such a facility in Ayutthaya for more than 10 years, with a capacity of 60,000 tonnes of coal per month.
“The investment budget for coal trading is being revised. We expect to invest many millions of baht in the business over the next few years,” Kalin said.
The company’s overall revenue this year is expected to come in at around Bt60 billion, an increase of roughly 30 per cent from Bt46 billion last year. About 20 per cent will be contributed from coal trading. SCG Trading aims to increase the revenue contribution from coal to 30 per cent by 2015, when it expects to have a trading volume of more than 7 million tonnes per year, up from about 4 million tonnes currently.
Kalin said building-materials business should also boost SCG Trading sales, thanks to good demand from developing countries in Southeast Asia. The company last week opened its first authorised dealer outside the country, in the new Burmese capital Nay Pyi Taw.
The dealer will operate as a wholesale store. It is looking to open more stores in five focus countries – Burma, Laos, Vietnam, Cambodia and the Philippines – as part of SCG’s plan to prepare for implementation of the Asean Economic Community in 2015.
“We target more than 100 authorised dealer stores in this region by 2015. Both SCG’s products and outsourced ones will be sold through this channel,” he added.
