Holcim, the world's biggest cement maker, has reduced its ownership in Siam City Cement Plc (SCCC) to 27.5% from 36.8% as part of its US$410 million in asset sales in Thailand and Guatemala.
The Swiss firm cut its stake in SCCC, Thailand's No.2 cement maker, by selling to Bangkok Broadcasting and Television Co (BBTV), the operator of Channel 7.
Members of the Ratanarak family, founding major Thai shareholders of SCCC, own a majority stake in BBTV and Bank of Ayudhya.
The asset divestment was cited by chief executive Bernard Fontana in a statement released yesterday that said Holcim is beginning a cost-saving programme.
The company also sold a 20% stake in Guatemala's Cementos Progreso SA to the majority shareholder Grupo Cemcal SA Progreso.
Prasit Rattanakijkamol, an analyst at Asia Plus Securities, said the sale of Holcim's ownership to the major shareholder was unlikely to affect SCCC in terms of operations.
The sale comes as the Thai cement market has recovered significantly from a demand slump caused by last year's severe flooding.
The Bank of Thailand said cement demand rose by 10.5% year-on-year in the first 10 months of 2012 to 26 million tonnes.
In October alone, cement use leaped 30% year-on-year.
Consumption is expected to hit 31 million tonnes this year, the highest in more than a decade but still far from the peak of 36 million tonnes before the 1997 Asian financial crisis.
With property growth and planned government projects, cement demand is expected to continue rising in the coming years.
SCCC previously said it will resume operations at two kilns shut down for two years.
"SCCC has said it will allocate exports to serve local consumption. This will enable the company to improve profit margins substantially," said Mr Prasit.
Phil Roseberg, an analyst at Sanford Bernstein & Co in London, called the recent moves of Holcim "strategic divestments".
Holcim said SCCC posted sales of $755 million last year and employs 3,250 people.
The divestments are Holcim's largest in four years since selling 85% of its Venezuelan assets to that country's government for $552 million in 2008.
Holcim is the only cement firm to have kept its investment-grade rating as European peers HeidelbergCement AG and Lafarge SA slipped to junk status after entering the financial crisis saddled with debt.
Shares of SCCC closed yesterday on the Stock Exchange of Thailand at 424 baht, up four baht, in trade worth 70.7 million baht.
About the author
- Writer: Nareerat Wiriyapong
Position: Business Reporter