Siam City Cement ramps up capacity

SET-listed

Siam City Cement Plc (SCCC), Thailand’s second-biggest cement maker, is investing 800 million baht to increase its cement production capacity over the next several years to capitalise on rising demand at home and in Cambodia, Laos, Myanmar and Vietnam (CLMV).

General manager Kajornsak Manosupsak said the funds will be used to build the fourth production unit at its cement plant in Saraburi province, giving additional production capacity of 600,000 tonnes a year.

“That will increase the company’s total production capacity to 1.35 million tonnes, up from 750,000 tonnes at present,” said Mr Kajornsak.

Major factors encouraging SCCC to raise its production capacity are the government’s massive investment in infrastructure, which is expected to boost demand for cement at home substantially.

Apart from the fast-growing economies in CLMV, those countries are also set to invest a lot in infrastructure to attract new investment, boosting cement demand, he said.

Currently, the company runs at 80% of total capacity and is expected to reach full capacity soon. The fourth unit is set to be up and running within the next two years, said Mr Kajornsak.

He said the total Thai domestic cement market should grow by 1-3% this year, with total market value reaching 400 billion baht.

This year, the company would focus more on producing special grade malta cement, which is better suited for certain types of roads, railways and reservoirs, said Mr Kajornsak.

He said the company focus on producing more special grade malta cement as it has a higher profit margin.

Thai annual cement consumption stood at around 10 million tonnes a year. Of that, less than 10% was special grade malta cement, said Mr Kajornsak.

In 2016, the company posted total revenue of 34.2 billion baht, up from 31.1 billion the previous year.

SCCC shares closed yesterday on the Stock Exchange of Thailand at 271 baht, down one baht, in trade worth 13.7 million baht.