SET-Listed Siam Cement Group (SCG), Thailand's biggest industry conglomerate, expects to see flat growth on its full-year 2016 revenue of 460 billion baht, due largely to the poor economic outlook, said president Roongrote Rangsiyopash.
In the first half of this year (January-June), the company posted a 2% drop in revenue of 218 billion baht. That was largely a result of lower chemical prices, which have cut into revenue from its chemical business.
The company, however, posted an 18% rise in net profit to 29 billion baht in the first half of the year, as increasing profit margins from the petrochemical business have lent support to overall profits, he said.
Currently, Mr Roongrote said SCG had yet to see any clear signs of improvement for the Thai economy as the government's infrastructure projects have yet to boost the economy or substantially increase demand for cement.
That is partly due to the seasonal drop in cement sales spurred by the rainy season, which disrupts major construction projects.
"This year, SCG expects domestic cement consumption to grow at a slower rate, with sales of cement projected at 16 million tonnes. We project the company's cement exports to Asean country to be 4.5 million tonnes this year," he said.
Mr Roongrote said he expected total domestic demand for cement this year to rise by 1% to 40 million tonnes.
SCG currently has domestic production capacity of 23 million tonnes. It produces an additional 980,000 tonnes in Cambodia, 1.8 million tonnes in Laos, 1.8 million tonnes in Indonesia and 1.8 million tonnes in Myanmar.
SCG plans an investment budget of 50 billion baht for the year, including mergers and acquisitions, said Mr Roongrote.
That is slightly above last year's investment budget of 45 billion baht.
In the first half of this year, SCG spent 19 billion baht to that end, he added.
"The company will propose a five-year investment budget (2016-20) to the board of directors in August. Mostly, the investment will go into the cement-building materials business group, both for the domestic and international markets," he said.
Meanwhile, SCG Chemicals plans to shut down its Rayong Olefins site 3 in November 2016, causing a 1.4 million tonne olefin disruption over a 45-day period.