SCCC cements expenditures

Siam City Cement Plc (SCCC), Thailand's second-largest cement maker, will spend 3.6 billion baht this year and next to expand production in Thailand and build a new plant in Indonesia.

Managing director Philippe Arto said the company will spend 1.45 billion baht to upgrade one of the two kilns that have been shut down for five years at its Saraburi plant.

With daily capacity of 4,500 tonnes, the kiln will be reactivated in October.

The capacity expansion is aimed at serving domestic cement consumption, which is expected to grow by 7% to 33.4 million tonnes this year, with SCCC intending to maintain its market share of 27-28%.

Some 460 million baht will be spent to develop the third production line of mortar.

Providing additional annual capacity of 250,000 tonnes, the expansion will be completed in the second half of next year.

In Indonesia, a US$40-million wood substitute Conwood plant on Java will be operational next year, with annual capacity of 36,600 tonnes.

Currently, the Thai Conwood plant generates annual revenue of 1.2 billion baht for SCCC.

As well, 500 million baht will be paid next week for the acquisition of lightweight concrete manufacturer Super Block Co Ltd.

Mr Arto said these investments will be on top of SCCC's normal capital expenditures, which are estimated at about 2 billion baht.

Meanwhile, SCCC's proposed 1-million-tonne cement factory in Cambodia is undergoing a feasibility study.

The investment in Cambodia will be made through a joint venture with local distributor the Chip Mong Group, while SCCC commands the largest share at 40%.

Last year, SCCC achieved revenue of 26.4 billion baht, up by 14% from 2011, for a net profit of 3.6 billion, up by 10.4%, on the back of strong domestic cement consumption and significant growth in cross-border exports.

Figures from the Office of Industrial Economics show domestic cement consumption grew by 11% last year, driven by infrastructure projects, commercial use and real estate sector expansion.

SCCC increased its total cement sales in line with market growth, while border markets grew much faster at 20%.

Fourth-quarter net revenue tripled year-on-year to 756 million baht as net sales surged by 26% to nearly 6.4 billion.

Mr Arto said the sale of a 9.3% stake in SCCC by Switzerland's Holcim Ltd to Bangkok Broadcasting and Television (BBTV) will not affect company management.

The sale reduced Holcim's share in the cement maker to 27.5%, while that of the Ratanarak Group, which is a major shareholder in both SCCC and BBTV, increased to 45%.

Shares of SCCC closed yesterday on the Stock Exchange of Thailand at 398 baht, unchanged, in trade worth 35.9 million baht.

About the author

Writer: Nareerat Wiriyapong
Position: Business Reporter