
Displaying items by tag: Thailand
Thailand: Siam Cement has reported a 14% drop in its net profit in the second quarter of 2014. Weak domestic cement demand and lower chemical earnings hit the company after months of political unrest. Thailand's domestic cement demand is expected to grow by 1% at most in 2014 due to a drop in construction activity and a lack of new infrastructure projects, according to Siam Cement's chief executive Kan Trakulhoon.
Siam Cement posted a net profit of US$268m in the April – June 2014 period, down from Euro310m during the same period of 2013. Cement and building materials contributed 41% to Siam Cement's profit and weak domestic demand prompted an increase in exports.
"We export more to ASEAN nations, but we don't make much profit from exports," said Trakulhoon. "This is to help support our supply chain, while we continue to run at full capacity."
Siam Cement expects its performance to be positive in 2014 on expectations that Thailand's 2015 fiscal budget will speed up infrastructure investments, while consumer confidence should recover from the fourth quarter of 2014.
"Domestic cement demand should drop by 2 - 3% in the third quarter of 2014 from a year earlier, while growth in the fourth quarter of 2014 should be flat," said Trakulhoon. He added that cement demand in Thailand for the whole of 2014 would grow by 0 - 1%.
Siam Cement is also stepping up its ASEAN expansion by revising its current US$7.8bn five-year investment plan that kicked off in 2013. The plan is being revised for approval at a board meeting in August 2014. Cement plants in Cambodia, Indonesia, Laos and Myanmar are already in the pipeline, while other building material plants are planned to reduce shipping costs through increased local production.
"There are many opportunities in the ASEAN region, including mergers and acquisitions," said Trakulhoon. "There is no limit. It depends on how fast we acquire the companies. We are open to any acquisition proposals." Trakulhoon added that Siam Cement's primary focus outside of Thailand is on companies in Vietnam and Indonesia, where operations have been especially robust. ASEAN business rose by 20% in the first half of 2014 and now accounts for 9% of Siam Cement's overall sales revenue. That proportion is expected to rise in the coming years.
Thailand: Siam Cement Group's subsidiary SCG Cement has acquired a 55% stake in Thai cement-bonded particleboard maker Panel World for US$17.2m. Panel World has an annual production capacity of 2.4Mm2 and is set to double after a new production line starts operating by the end of 2014. Panel World posted a net profit of US$2.53m in 2013 on sales of US$9.81m.
"SCG is determined to increase its competitiveness and strive to be a market leader in building materials," said SCG's president and CEO Kan Trakulhoon.
Thailand: Siam Cement Group (SCG) is poised to revamp its business plans to cope with the impact of the political turmoil and adverse economic outlook, setting its sights on more exports and trading with the Asean market.
President and chief executive Kan Trakulhoon said that the country's prolonged political problems and the absence of a functioning government have affected the operational plans of SCG. According to Trakulhoon, the existing business plan called for the company to cut cement shipments from 5Mt in 2012 to 4Mt in 2013 and 3Mt in 2014, to better serve domestic consumption. However, given the unfavourable market conditions in Thailand, SCG will keep cement exports at 4Mt in 2014, with Myanmar, Cambodia and Vietnam as the target markets.
"The overall market of cement and construction materials has shrunk over the past couple of months thanks to the sluggish economy, which has been hit by the prolonged political problems,'' said Trakulhoon. "Earlier we forecast that the two industries should grow by 8 - 9% in 2014, but now we see they will grow at best by 4 - 5%."
According to Trakulhoon, sales of cement and construction materials fell by 7 - 8% during January and February 2014 against the 4 - 5% growth that SCG had projected. Normally late December 2013 until April 2014 is the peak selling season for products in this group, as people build and renovate their homes.
Cement and construction materials are expected to be harder hit in the second and fourth quarters of 2014 as the construction and property business slows down in line with tepid economic prospects and a lack of new private investments because of the absence of a new Board of Investment (BoI). Investment proposals worth US$15.3 – 18.4bn are still awaiting approval from the BoI's main board, which has yet to be appointed because of the political crisis since October 2013, when board member terms expired.
SCG itself has one project, a joint venture with a Japanese partner, which is pending approval from the BoI. The company also has two other joint venture investment projects with the Japanese investors waiting to submit the investment privileges with the BoI.
Trakulhoon said that he remains upbeat that SCG's sales revenue would grow by at least 10% in 2014, up from US$13.3bn in 2013. Domestic sales are expected to make up 65% of the group's sales revenue in 2014, with overseas sales contributing the remaining 35%, 20% of which will come from Asean nations.
Italcementi considering Myanmar market move
12 March 2014Myanmar: Italcementi is considering entering the Myanmar market in the next few years, its chief executive has said. Carlo Pesenti said that the Italy–based international cement producer was negotiating with a local partner in Myanmar and studying the country's foreign investment law, in an interview with The Nation.
Italcementi is already active in Southeast Asia through its Jalaprathan Cement and Asia Cement subsidiaries in Thailand. In 2013 the country helped shore-up Italcementi's annual results with a rise in turnover of 18.1% year-on-year to Euro269m and earnings before interest, taxes, depreciation and amortisation (EBITDA) rose by 58.8% to Euro51.5m. Italcementi Thai cement shipments increased by 13.8% as an additional kiln was brought back on-stream.
There has been an interesting knock-on effect from further economic integration of the Association of Southeast Asian Nations (ASEAN) this week. Holcim Philippines may delay the construction of a 2.5Mt/yr cement plant in Bulacan province due to a drop in import tariffs in 2015. Vietnam or Indonesia were named as possible sources of clinker due to their excess capacity.
The ASEAN group comprises 10 countries including Brunei, Indonesia, Malaysia, the Philippines, Singapore, Thailand, Vietnam, Laos, Myanmar and Cambodia. Their respective cement production capacities range from 0.3Mt/yr at a clinker grinding plant in Singapore to Indonesia's integrated cement production capacity of 45Mt/yr. In total the ASEAN countries have a production capacity of around 220Mt/yr for a population of about 600m with national gross domestic products (GDP) per capita ranging from US$900 (Laos) to US$52,000 (Singapore).
One scenario for cement producers in the ASEAN countries is that they might be swamped by exports from places like Vietnam. That country had a production capacity of 73Mt/yr in 2013 with cement sales predicted to rise to 63Mt in 2014. Assuming the government released figures are correct, that leaves at least a 10Mt of cement production-sales gap that could torpedo a neighbouring country's cement industry in the free trade area.
Indonesia, the other potential source of clinker that Holcim Philippines mentioned, has seen construction growth slow and production capacity grow. Holcim reported in its nine-month report in November 2013 that, while national cement sales had risen by 5.3% to 41.6Mt, supply capacity had risen by 9% to 59Mt/yr. Assuming equal sales distribution throughout this suggests a capacity gap of 4Mt.
Some politicians in the region have complained that impending free trade area will create winners and losers. At a recent ASEAN meeting in Yangon, Myanmar a Myanmar planning minister raised the issue of a development gap within the ASEAN region calling for renegotiation for countries like Myanmar, Cambodia and Laos.
Meanwhile both the cement industries in Vietnam and Indonesia have clearly anticipated the implications of the ASEAN Economic Community. The Vietnam National Cement Association expects to remain competitive within the ASEAN region and against Chinese imports after 2015. In Indonesia State Enterprises Minister Dahlan Iskan stated this week that the cement industry was ready for the ASEAN Economic Community thanks to the government's strategy to consolidate its major cement producers within one company, Semen Indonesia. Consistent cement industry growth in South East Asia may be about to change.
Laos: A leading Thai cement company, widely speculated to be Siam Cement Group (SCG), will co-invest with Lao-Phatthana Cement Industry Co, a unit of Souksomboon Group, in the construction of a US$330m cement plant in Khammouane, Laos.
Chaovalit Ekabut, SCG's chief financial officer and vice-president for finance and investment, declined to comment on whether the Thai cement producer is SCG, but said the group continued to explore opportunities in the Asean countries.
Chittakorn Souksomboon, president of Souksomboon Group, said that the Khammouane plant will have a clinker capacity of 1.6Mt/yr. The clinker will become 2.2Mt/yr of OPC and blended cement, with half serving the Laotian market and the rest exported to Thailand. The plant is due to be completed at the end of 2015 or early 2016.
"The possible Thai partner with 100 years of history is interested in jointly investing with us because we have a 50-year concession from the Laotian government to operate a limestone mine on 3875m2 nearby," said Souksomboon. The Souksomboon Group is keen to forge a partnership with a Thai cement firm because it wants to sell construction materials through a Thai hardware chain in the future.
Cement demand in Laos is forecast at 3.5Mt/yr, but supply is just 1.7Mt/yr. The landlocked country must import cement from China and Thailand. The Laotian economy is growing robustly with infrastructure projects such as roads, double-track rail and dams being developed ahead of the Asean single market comes into being in late 2015.
Souksomboon Group already runs a cement plant in Vientiane, Laos and is building a plant in Nakhon Phanom, Thailand, which is due to be completed in 2014.
Thailand: Thai TPI Polene Public Co. Ltd. has placed an order with Germany's Siemens for engineering and supply of the power distribution system and drives for a new clinker production line at its existing plant in Saraburi, Thailand. Siemens will supply the drive solutions as well as the switch-gear for the high, medium and low-voltage distribution systems and is also responsible for project management and engineering.
The deal for the drive systems covers 20 slip-ring rotor motors for the main drives, 12 gear units, 33 variable-speed drives for fans and two multiple drive systems for cooling units. Operation is due to commence in October 2014.
The Thai cement producer had earlier decided to add a fourth production line at the factory to boost production capacity in view of rising demand. The new line will have a capacity of 12,000t/day of clinker. Upon completion, the four cement production lines at TPI Polene in Thailand will have a combined capacity of 12Mt/yr. Siemens has already supplied the Thai TPI Polene Public Company Limited with electrical equipment for the three existing clinker production lines as well as for the cement and coal mills.
Italcementi expects weaker growth in Thailand for 2014
30 September 2013Thailand: Asia Cement, the Thai subsidiary of Italcementi Group, has projected slower growth in revenue in 2014 due to a likely weaker domestic market and uncertainty over the government's US$64bn infrastructure investment.
Co-managing director of Asia Cement, Nopadol Ramyarupa, said that Thailand's fourth-largest cement maker expects revenue growth of only 4% in 2014, according to the Bangkok Post. The company's revenue for 2013 is predicted to rise by 17.6% year-on-year to US$319m from US$271m in 2012.
"The economic slowdown and revised gross domestic product figures have affected our projection," said Nopadol, adding that growth in the overall cement industry is heavily tied to the country's economy and to the construction sector in particular. Co-managing director Roberto Callieri added that he hoped that the Thai government's US$64bn infrastructure investment would stimulate the construction sector sufficiently to meet Asia Cement's 'optimistic' growth projection of 4% over five years. Asia Cement has not been affected by labour shortages in the country or by an increase in the daily minimum wage to around US$9.50/day.
Asia Cement has a 14% share of Thailand's 33Mt/yr cement market. The company is operating at 80% of its combined annual capacity of 7.3Mt/yr its cement plants in Saraburi, Nakhon Sawan and Phetchaburi provinces.
Siam Cement Group reports robust Q2 earnings
07 August 2013Thailand: Siam Cement Group (SCG) has reported that its revenue rose by 10.5% year-on-year to US$412m for the three months ending on 30 June 2013 from US$373m. Net profit for the period rose by 10.3% to US$369m from US$334m.
Chief executive officer Kan Trakulhoon said that SCG will acquire a company that makes roofing products in Cambodia, Laos, Vietnam and the Philippines, extending a strategy of expansion in Southeast Asia to access rising incomes in countries neighbouring Thailand.
Thailand: German steel and engineering group ThyssenKrupp has won a Euro150m contract to build a cement plant in Saraburi near Bangkok for TPI Polene. The plant will have a cement production capacity of 10,000t/day and is scheduled to start production in 2015.
"With domestic cement demand expected to reach 45Mt/yr by 2015, Thailand is an important market and production location in Southeast Asia," commented ThyssenKrupp.