Siam Cement buying block plant in indonesia
Siam Cement is expanding its interests in Indonesia through a Bt1.25-billion acquisition of a factory producing lightweight concrete blocks.
The board of directors on Monday approved SCG Building Materials Co’s 100-per-cent acquisition of the plant in West Java province, about 60 kilometres from Jakarta. With production capacity of 6 million square metres, commercial operation is expected in early 2014, SCC said in a statement.
For several years, demand for lightweight concrete blocks in Indonesia has grown significantly, and this trend is expected to continue over the next five years. The demand drivers are the vibrant construction sector in that country, in addition to the increasing trend to replace bricks with lightweight blocks to reduce labour costs.
Meanwhile, in another statement to the Stock Exchange of Thailand, SCC said it estimated a loss of about Bt1 billion in quarterly income from Bangkok Synthetic Co, which is 26 per cent owned by SCC, after the explosion at BST Elastomers Co. It said this would cut quarterly equity income by Bt300 million to Bt350 million.
It also estimated an additional Bt500-million loss per quarter as a result of disruptions to SCC’s supply chain and upstream feedstock reconfigurations, which are expected to be minimised as alternative external clients are secured. It also estimated an additional Bt150-million quarterly loss as a result of BST’s fixed costs, primarily depreciation.
It said the estimates did not take into account BST Elastomers’ asset write-down and the eventual insurance reimbursement, which depends on its discussions with insurance providers.
