Italcementi to keep Asean production base here
THAILAND will continue to be Italcementi Group’s production base in Asean and its springboard for expanding into Myanmar after a German company acquires Italmobiliare’s 45-per-cent stake in Italcementi in July, group chief executive officer Carlo Pesenti
“Since Italmobiliare and HeidelbergCement signed an agreement regarding the sale to HeidelbergCement of Italmobiliare’s 45-per-cent stake held in Italcementi in July last year, we have discussed the policy for our subsidiaries in Asia, including Thailand,” he said.
“HeidelbergCement, which will be the major shareholder of Italcementi when the deal is complete this July, has a policy to maintain the business in Thailand and its business plan to expand [into] Myanmar, because HeidelbergCement did not have [a presence] in Thailand.
“Thailand is our production hub and business arm for expanding in Asean,” Pesenti said.
This will be an opportunity for HeidelbergCement to expand its business in Asean after the deal is complete, he added. Italcementi says the rationale of this merger is supported by a perfect geographical fit with Heidelberg-Cement’s existing footprint – with limited overlap of plants in Belgium and the United States – and the significant potential for synergies and the combination of strong innovation and research-and-development capabilities of both companies.
The combined group will have a production capacity of about 200 million tonnes of cement, 275 million tonnes of aggregates and 49 million cubic metres of ready-mix concrete. Pro forma 2014 revenues were about 16.8 billion euros, generated in more than 60 countries worldwide.
Italcementi Group holds a 49-per-cent stake in Thailand’s Asia Cement. The group also has business in Bulgaria, Morocco, Kazakhstan, Egypt and India, as well as operating in North America.
Last year the group reported consolidated revenues of 4.3 billion euros (Bt170 billion).
Asia Cement and its subsidiary Jalaprathan Cement have production capacity of 5 million tonnes of cement a year.
Nopadol Ramyarupa, managing director of Asia Cement, told The Nation the company had set aside an investment budget of Bt300 million to Bt500 million for maintenance of its three production plants here – in Saraburi, Phetchaburi and Nakhon Sawan – this year.
The company is also looking into regional expansion, including into Cambodia, he said. However, it has to wait for the deal between HeidelbergCement and Italcementi to be done in July before making a decision on expansion abroad.
He said implementation of the Asean Economic Community presented good potential for doing business in Myanmar and Cambodia as their governments embark on infrastructure projects.
Last year, Asia Cement recorded revenue of about Bt7 billion, up 3 per cent from 2014. Up to 10 per cent of its revenue was from overseas, and the rest from domestic demand.
The company targets revenue growth of at least 3 per cent again this year thanks to the Thai government’s policy to expand investment in infrastructure, projects that may run from the second half of this year into next year. This would boost the demand for cement by as much as 3 per cent this year, Nopadol said.
