Siam Cement plans US comeback
text size

Siam Cement plans US comeback

SCG finished 2011 with 20% growth

Siam Cement Group (SCG) will bolster its US presence on the back of positive signs of an economic recovery in that country.

The move will be aimed at meeting this year's revenue growth target of 12% to 400 billion baht.

Kan Trakulhoon, the president and chief executive of Thailand's top industrial conglomerate, said a team has been assigned to prepare the group's re-entry into the US market after positive signs, including the recent sharp rebound in the US stock exchange and last month's 7% growth in housing sales.

As recently as 2006, the US was one of SCG's biggest export markets, accounting for 20% of shipments.

Even bulky products such as cement were sent to the US West Coast at competitive cost.

But demand dropped sharply in recent years, and the country now represents only 1% of shipments, Mr Kan said at yesterday's inauguration of the SCG pavilion at the BoI Fair 2011.

He said the US economy has clearly bottomed out, with a steady recovery expected from now on.

''We see an opportunity to boost petrochemical sales there, especially high value-added products that are competitive in terms of cost,'' he said.

As well, SCG remains strong in the building materials market, with Cotto roofing products still the top brand at Home Depot stores, said Mr Kan.

However, he cautioned it will take up to four years for SCG to regain its 20% share in the US market, as unemployment remains high at 9%.

Exports make up 29% of SCG's revenue, with Asean counties topping the list at a combined 40% of the figure.

The Middle East and African markets are growing, while Europe is stagnant at about 4%.

In 2012, SCG plans to increase its overall turnover by 11.1% to 400 billion baht. Despite the severe flooding that saw operations suspended at 12 of the group's factories, SCG finished last year with 20% sales growth, according to Mr Kan.

Commenting on the floods that ravaged more than one third of Thailand in 2011, Mr Kan said a key to restore investors' confidence and attract new investors is the execution of the 350-billion-baht flood prevention projects.

Very few existing investors will relocate their production bases from Thailand. If the plans are implemented quickly and efficiently, the country can even attract new investors after investments have been put on hold or delayed after the floods, Mr Kan said.

At the same time, Thailand's automotive industry is one of the largest in Asia, with a large pool of part suppliers available, he added.

Roongrote Rangsiyopash, the president of SCG Paper, said his company's plants in Nava Nakorn Industrial Estate are now cleaning up after a nearly two-month inundation.

''I think everyone has been waiting to hear clear strategies from the government, especially tax holidays from the Board of Investment,'' he said.

The three-year tax holiday for the company's paper plants in Nava Nakorn expired a long time ago, Mr Roongrote added.

Meanwhile, Masatoshi Kimata, president of Siam Kubota Corp, said Kubota in Thailand is still committed to Thailand although one of its plants here was hit by floods.

The confidence is reflected by a new factory set to open in April this year at 304 Industrial Park in Chachoengsao for a production of casting parts for diesel tractors.

''We hope that we will maintain the production at Navanakorn factory after some products have been shifted to other factories, including the one in Indonesia,'' said Mr Kimata, referring to the inundated plant in Pathum Thani.

''Navanakorn operators will invest in the estate's flood-protection walls but the fact that the government has made flood prevention a national agenda is good,'' he noted.

Do you like the content of this article?
COMMENT