Displaying items by tag: SCG Cement

US: Thailand-based Siam Cement Group (SCG) has invested in Rondo Energy, developer of the Heat Battery. The cement company aims to help its various business lines to decarbonise their operations through deployment of Rondo Energy’s technology. Rondo Energy said that the partnership will support and earlier expansion of its product’s footprint across Southeast Asia and worldwide.

Rondo Energy chief executive officer John O’Donnell said “Rondo is excited to be working with SCG. Rondo’s technology opens a new pathway for SCG to achieve their deep decarbonisation goals and simultaneously reduce their operating costs. SCG’s deep capabilities in execution and quality will enable Rondo to deliver reliable energy infrastructure rapidly and at scale. Together, Rondo and SCG have the global footprint to deliver deep decarbonisation projects, including heat as a service projects in Southeast Asia and worldwide.”

Thailand: Siam Cement Group has received approval to issue a new lot of debenture worth US$426m on 3 October 2022. The group says that the debenture replaces its existing lot, which will retire for redemption on 1 October 2022. The new lot has an interest rate of 3.25% and matures on 1 October 2026.

Thailand: Siam Cement Group (SCG) recorded sales of US$8.29bn in the first half of 2022, up by 19% year-on-year from US$6.95bn in the first half of 2021. Cement and building materials revenues were US$2.82bn, 34% of total sales, up by 12% from US$2.52bn in the first half of 2021. The group’s earnings before interest, taxation, depreciation and amortisation (EBITDA) dropped by 24% to US$1.15bn from US$1.51bn.

SCG recorded domestic declines in demand for cement and ready-mix concrete of 5% and 7% respectively in the first half of 2022. Cement demand also fell by 10% in Cambodia and by 2% in Myanmar, but rose by 5% in Indonesia and by 1% in Vietnam. In Thailand, SCG expects cement demand to “improve” in the third quarter of 2022, but noted the possible mitigating impact of rising inflation.

Many first quarter financial results for cement producers are out already and what can be seen so far deserves discussion. The first observation is that the sales revenues of Chinese companies have suffered compared to their international peers. As can be seen in Graph 1 (below) CNBM increased its sales slightly in the first quarter of 2022 but Anhui Conch and China Resources Cement (CRC) had significant falls. Stronger results from CNBM’s non-cement production subsidiaries released so far suggest that the parent company’s slow performance is likely due to the cement market. The China Cement Association has reported that national cement output dropped by 12% year-on-year to 387Mt in the first quarter of 2022. It blamed this on the latest local coronavirus wave, limited construction project funds and poor weather.

Graph 1: Sales revenues in the first quarter of 2022 from selected cement producers. Source: Company financial reports. Note: SCG data is for its building materials division only.

Outside of China sales revenue growth has been better with Holcim and Dangote Cement leading the companies presented here. Holcim attributed its success to “strong demand, acquisitions and pricing”. Demand and pricing have been familiar refrains in many of the results reports this quarter. The undertone though has been the destabilising effects upon energy prices by the ongoing war in Ukraine. Holcim’s head Jan Jenisch summed it up as navigating “challenging times, from the pandemic to geopolitical uncertainty.” The producers with operations in the Americas and Europe seem to have coped with this so far mostly due to resurgent markets. Quarterly sales revenue growth for Holcim, CRH (not shown in the graphs) and Cemex each exceeded 10% year-on-year in both of these regions.

The regionally focused companies presented here have suffered more. India-based UltraTech Cement said that its energy costs grew by 48%, with prices of petcoke and coal doubling during the period. Nigeria-based Dangote Cement reported that its group sales volumes were down 3.6% mainly due to energy supply challenges in Nigeria. Internationally, its operations relying on cement and clinker imports – in Ghana, Sierra-Leone and Cameroon – were also hit by high freight rates caused by global supply chain issues. Thailand-based SCG said that national demand for cement demand fell by 3% due to negative geopolitical effects causing inflation, a delay to the recovery of tourism and a generally subdued market.

Graph 2: Cement sales volumes in the first quarter of 2022 from selected cement producers. Source: Company financial reports.

It’s too early to read much into it but one final point is worth considering from cement sales volumes in the first quarter of 2022. They have appeared to fall for the companies that have actually released the data. The reasons for CRC in China and Dangote Cement in Sub-Saharan Africa have been covered above. Holcim’s volume decline was 2% on a like-for-like basis and the others were all very small changes.

To summarise, it’s been a good quarter for those cement producers covered here with operations in North American and Europe. Energy instability caused by the war in Ukraine so far seems to have been passed on to consumers through higher prices with no apparent ill effect. The regional producers have suffered more, with the Chinese ones having to cope with falling demand and the others finding it harder to absorb mounting energy costs and supply chain issues. Plenty more first quarter results are due from other cement companies in the next few days and weeks and it will be interesting to see whether these trends hold or if others are taking place.

Thailand: Siam Cement Group (SCG) recorded first-quarter sales of US$4.43bn in 2022, up by 25% year-on-year from first-quarter 2021 levels. The company’s net profit was US$257m, down by 40%.

Thailand: Siam Cement Group (SCG) has secured a contract with Denmark-based COBOD to provide Thai distribution services for the company’s COBOD 3D construction printers. SCG says that it will help the supplier to launch a construction sector transformation. It says that it chose COBOD’s printer as the option with the most in-market experience.

SCG International managing director Abhijit Datta said “3D construction printers have been widely used in many parts of the world with excellent results. The technology helps reduce waste and increase construction times with foolproof simulation and minimal numbers of labourers.” He continued “Together with COBOD, we will improve Thailand’s construction market with the future expectation of extending cooperation in the ASEAN. With our regional expertise and domestic solid business alliance relationship, we are ready to assist our partner in achieving long-term success.”

Thailand: Siam Cement Group (SCG) says that it is reviewing its planned US$2.4bn investment programme for 2022 due to the changing conditions it faces following the Russian invasion of Ukraine and ensuing cost rises. The Bangkok Post newspaper has reported that the company has recorded a rise in raw materials and energy costs across its businesses.

President and chief executive officer Roongrote Rangsiyopash said "We will delay some new investment projects, especially greenfield investments, and consider increasing more investments under merger and acquisition plans to avoid possible impact on our long-term financial management." Rangsiyopash added "Prices of cement and building materials will also gradually increase."

Thailand: Sales from Siam Cement Group’s (SCG) cement business rose by 6% year-on-year to US$5.61bn in 2021. Its earnings before interest, taxation, depreciation and amortisation (EBITDA) fell by 13% to US$145m. The company said that demand for cement improved gradually in the fourth quarter of 2021 following Covid-19 related shutdowns in the third quarter. Overall group sales were US$16.5bn in 2021, up by 33%, and net profit rose by 38% to US$1.4bn, boosted by the company chemicals division performance.

President and chief executive officer Roongrote Rangsiyopash said that its integration of environmental and social governance, along with a digital transformation, during the year contributed towards growth, along with a demand rise in line with the decline in Covid-19’s ongoing impacts.

Philippines: Siam Cement Group has established a subsidiary to provide logistics services for its business in the Philippines. Reuters News has reported that the group has injected US$205,000-worth of investment into the company.

Thailand: Siam Cement Group (SCG) has received approval for the issuance and offering of debentures up to US$2.97bn in its subsidiary SCG Chemicals. Reuters News has reported that the group is offering the shares under a medium-term note programme.