SCCC to reopen clinker plant shut in 2008
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Owing to strong demand for cement in the country and the region, Siam City Cement (SCCC) plans to reopen next year one of the two clinker production facilities it shut down in 2008.
Made from limestone and clay, clinker is a raw material used in the production of cement.
With the opening of the clinker factory in October, SCCC’s production capacity will rise by at least 10 per cent from 1.4 million tonnes, managing director Philippe Arto said.
He was speaking at an event to mark the handover of a new building to Aroyama School under the “Green School” campaign in Chiang Mai. The handover is a part of its “Sustainable Green” Corporate Social Responsibil-ity programme, launched in 2010.
SCCC shut down the two plants, which had total capacity of 2.25 million tonnes in 2008 because of an increase in production costs and a decline in demand for cement.
However, the company has recently seen strong growth in demand, and next year targets year-on-year growth of at least 5 per cent. This follows an increase in both public- and private-sector projects. Meanwhile, the company’s board of directors will consider a plan to invest in Cambodia early next year. The company has been working on the plan since 2010.
“Our board of directors will make a decision on this plan in 2013. This would be our first investment outside Thailand,” he said.
If the plan is approved, SCCC will set up a cement plant in Cambodia via a joint venture with a local partner. “We are interested in investing in Cambodia because we have a more-than 40-per-cent share in the cement market in the country,” Arto said.
Controlling costs
Based on the forecast increase in demand, Arto believes the company’s total sales in 2013 will grow by at least 5 per cent compared to this year. The company is trying to cut both management and production costs to boost its net profit, because while demand is rising, its price is not changing due to high competition. Furthermore, energy costs are on the rise.
“We have a policy to manage our costs because we cannot raise our price. However, we believe we will control our costs and see our net profit margin improve in 2013,” he said.
SCCC’s sales in the first nine months of this year climbed 10.8 per cent to Bt20.02 billion from Bt18.08 billion in the same period of last year on growing demand, but net profit dropped 5.3 per cent to Bt2.88 billion from Bt3.04 billion on rising energy costs.
On the back of strong cement consumption driven by infrastructure projects, commercial expansion and cross-border market growth, SCCC hopes to expand its sales in the domestic and cross-border markets by 15 per cent. Ready-mix-concrete volume increased by 9 per cent, mortar by 49 per cent and Conwood by 24 per cent.
