Siam Cement Group (SCG), Thailand's leading industrial conglomerate, expects Asean markets to compensate for a lack of domestic demand.
"The Thai market has continued to decline over the past three quarters, but other Asean markets have been very good," president and chief executive Kan Trakulhoon told the Bloomberg Asean Business Summit in Bangkok yesterday.
He said SCG's sales volume had grown by 12% in the first nine months of this year despite weak domestic demand, as sales in Myanmar, Laos, Cambodia, Vietnam and Indonesia had been strong.
"I'm confident that sales revenue from Asean in 2014 will exceed 100 billion baht from last year's 80 billion," said Mr Kan.
However, 62% of SCG's sales still come from Thailand.
The company has allotted half its five-year investment budget of 250 billion baht for Asean.
At present, 17% of SCG's assets and 30% of its workforce are in Asean, mostly in Indonesia and Vietnam.
Mr Kan said the government had many good plans, especially infrastructure projects that would help regional connectivity.
However, the government must work towards winning back foreign investor confidence, although tax incentives to promote Thailand as an international headquarters are a step in the right direction, he said.
"Ensuring a stable political situation and revising outdated business laws to reflect new conditions are also crucial," Mr Kan said.
Despite flat growth in domestic cement demand this year, SCG expects 5-6% growth next year as government investment programmes are carried out.
Mr Kan said continuing decreases in oil prices would lead to cheaper logistics costs for SCG.
"While some stock loss will be booked this quarter, I believe a better product margin will compensate," he said.
"If the price of oil continues to decline, then next quarter will be better, as there will be less booking of stock loss."
Siam Cement shares (SCC) closed yesterday on the Stock Exchange of Thailand at 470 baht, up two baht, in trade worth 476 million baht.