FRIDAY, March 29, 2024
nationthailand

Asia set to drive stronger growth for cement giant Italcementi, says chief executive

Asia set to drive stronger growth for cement giant Italcementi, says chief executive

ITALCEMENTI GROUP, the world's leading cement manufacturer, foresees stronger growth of 2-3 per cent this year, with the key driver being Asia, backed by economic recoveries in the European Union and North America.

Given the expected stronger growth, the group plans to expand its businesses to African countries such as Mozambique, Ghana and Tanzania, CEO Carlo Pesenti said during an interview with The Nation last week.
“The company foresees better performance in Asia, including Thailand, with revenue for the continent projected to grow 3-6 per cent this year, while overall growth for the company will be 2-3 per cent,” he said.
Italcementi reported consolidated global revenue of 4.15 billion euro (Bt144.5 billion) for last year, down 1.8 per cent from the 2013 level due to economic stagnation in the EU.
This year, Pesenti said the areas in which the group operated would see a recovery in North America and Asia, growth in the volume of demand in Egypt, and relative demand stability in Mediterranean Europe, although the market would weaken in France.
In this scenario, higher sales volumes and good sales price levels will support an upturn in margins, in addition to the positive effect on results of the appreciation of foreign currencies against the euro and the reduction in energy costs since the beginning of the year, he explained.
However, performance forecasts for some key markets continue to reflect elements of volatility, he added.
While Italcementi’s net financial position should be slightly higher than last year’s, in part owing to the weakness of the euro, year-end leverage is not expected to be higher than at the close of 2014.
The chief executive said he saw Asia, including Thailand and India, plus Africa as areas of great potential, as emerging growth required more investment in infrastructure development.
Economic recovery in the euro-zone would also make the group’s business expansion more stable.
“The results achieved last year confirm the validity of the action plan we have been implementing in recent years, culminating with the operating start-up of the strategic investments completed during the year in Italy and Bulgaria,” Pesenti said.
In line with its forecasts, as signs of an economic recovery emerge, the company now has a largely upgraded and highly efficient industrial network, backed by independent renewable electrical-energy production covering more than 11 per cent of its total requirement.
This capacity exceeds targets and could rise with the additional initiatives the company has planned, including an important wind farm in Egypt to counter local energy shortages, which have been limiting the group’s cement-production capacity in recent months, he said.
In addition to boosting industrial efficiency, the group has strengthened its focus on innovative materials and services with high added value.
With the new i.nova product-offering sys?tem fully operational, the innovation rate – the proportion of innovative products to total sales – rose to 6.6 per cent last year from 5.3 per cent in 2013, and the industrial contribution margin grew by 11 per cent from the previous year.
Italcementi expects to maintain its investment in innovation at the same rate this year, the CEO said.
 
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