Asia In Depth
A classic pattern of emerging market development, aside from the obvious rapid economic growth, is rising wealth accumulation and spending, leading to urbanisation, city expansion, and increased construction budgets, among others. One of major sectors benefiting from such trends is construction materials.
Notably, Asean construction materials players have enjoyed 10% annual revenue growth, while realising 4% annual earnings growth in the past five years. Growth has been similarly impressive in Thailand, fuelled by construction activities and a real-estate boom, raising intriguing questions: will growth be short-lived, and what should players do in response?
Major growth drivers are both local and regional. Domestic cement demand, for example, has enjoyed nearly double-digit growth annually in 2013. Three factors are contributing to the rise in consumption. First, the high-rise residential real estate boom in Bangkok has created robust consumption of cement and steel for building structures.
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