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Board nods to Bt23-bn stakes

Oct 25. 2012
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Siam Cement Group's board has approved a combined Bt23.2 billion for investment in a number of major projects, including the establishment of a cement plant in Indonesia and capacity expansion at its cement plant in Cambodia.

The group will also invest in the expansion of packaging-paper capacity at its plants in Kanchanaburi and Ratchaburi.

Kan Trakulhoon, president and chief executive officer of SCG, yesterday said the group would invest Bt11 billion in setting up a cement plant in West Java. The facility, which is scheduled to commence operations in 2015, will have an annual production capacity of 1.8 million tonnes.

The board also approved a Bt5.5-billion investment to increase the capacity of its Kampot Cement plant in Cambodia by about 900,000 tonnes per annum, with the additional output expected to come on-stream in 2015. The plant’s current annual production is about 1 million tonnes.

Kan said the combined investment in Indonesia and Cambodia would meet rising demand in those markets, which is expected to increase by between 5 and 10 per cent per year over the next decade.

The SCG board also approved an outlay of Bt6.7 billion for expanding its packaging-paper factories in Kan-chanaburi and Ratchaburi, which will raise combined capacity by about 400,000 tonnes per annum from 2014. The expansion will give SCG the highest manufacturing capacity |for packaging paper in Asean, at more than 2.3 million tonnes per year, |he added.

Meanwhile, SCG Group has submitted plans for a cement plant and logistics system in Myanmar, together worth about Bt11 billion.

The manufacturing side of the project is for the production of 1.8 million tonnes of cement per annum. The plans will be submitted to the group’s board once they have been approved by the Myanmar government.

SCG is also negotiating with its investment partners, suppliers and loan providers over the previously announced mega-petrochemical complex project in Vietnam, worth about US$4.5 billion (Bt138 billion), said the group chief.

“For our investment direction in Asean, we will focus on setting up our own plants, plus acquisitions or mergers, which will reduce the proportion of exports from our facilities in Thailand,” Kan said. “Having had the chance to meet with leading business people and CEOs at the Asean Business Council recently in Bangkok, we are convinced about the great growth potential in other Asean countries, especially Indonesia and Myanmar. Bangkok will be the centre used by the group in connecting with our businesses in other countries within the region.”

SCG generated revenue of Bt104.2 billion in the third quarter, up 11 per cent over the same period last year. Growth was driven by higher sales by its cement and chemicals businesses, which together increased 4 per cent from the previous quarter.

The group made a profit of Bt6.4 billion in the quarter, down 13 per cent year on year because of a lower profit margin from its chemical operations.

The group generated sales of Bt307.7 billion over the first nine months of the year, up 10 per cent from the same period last year. A profit of Bt16.6 billion was during the three quarters, down 31 per cent year on year – again because of the lower margin in its chemical business.

As to business in Asean, excluding Thailand, the group posted Bt8.3 billion in sales in the third quarter, representing about 8 per cent of total revenue and 44 per cent higher than in the same period last year.

The group had Bt55.3 million-worth of assets in Asean, accounting for about 14 per cent of its overall assets of Bt386 billion, as at September 30.

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