SCCC issues rosy outlook for cement

Labour shortage fails to slow building sector

Thai construction prospects remain promising, driven by the government’s infrastructure development plans.

Montri Nithikul, vice-president of Thailand’s second-largest cement producer Siam City Cement Plc (SCCC), said the construction sector outlook remains in good shape this year despite mounting worries about labour shortages and a lack of skilled labour.

‘‘The industry needs to look to innovation and apply more finishing products to reduce labour, which is now in a very critical condition,’’ he said yesterday in the company’s Influencer Seminar 2013.

‘‘Raw materials such as stone and sand are becoming scarcer because of diminishing supplies, stringent regulations and growing conflicts with communities.’’

SCCC raised cement prices 6% in the first half of the year, and they are predicted to keep rising throughout the year.

SCCC projects domestic cement demand to set at 33.4 million tonnes, up 7% this year but below last year’s 12%.

Cement exports were projected to grow at 7% to 12.8 million tonnes.

The firm intends to maintain its local market share of 27-28% this year.

Mr Montri said if the government’s massive infrastructure loan bill is approved, it will accelerate price increases the next six years.

Chantana Sukumanont, an adviser to SCCC, said the labour shortage was shifting cement demand from bags to bulk, or from a 52:48 split to 50:50 soon. Demand for cement bags has dropped every year since 2009 at 60.8% to 52.9% last year.

‘‘Currently a house is built by only three people, and one of them is the homebuilder operator himself. He comes with many tools and builds with more prefabricated pieces. This is a new trend,’’ she said.

SCCC expects its revenue to grow at least 10% this year.

Last year, SCCC recorded revenue of 26.4 billion baht, up by 14% from 2011, for a net profit of 3.6 billion, up by 10.4%. There was strong domestic cement consumption and significant growth in exports.

Mr Montri said labour problems forced many developers to shift to prefabricated techniques. SCCC delivers ready-mix concrete to Pruksa Real Estate and Sansiri, with the former buying 200,000 cubic metres a year.

Shares of SCCC closed yesterday on the SET at 428 baht, up 10 baht, in trade worth 49.91 million baht.