SCG predicts 5-6% rise in 2018 revenue
Citing megaprojects, petrochemical boost
SET-listed Siam Cement Group (SCG), Thailand’s largest cement maker and industrial conglomerate, expects 2018 revenue to rise by 5-6% to 472-477 billion baht, thanks to an expansion of petrochemical production capacity.
The company has a positive outlook about the government’s infrastructure projects in Thailand, while Asean countries are set to beef up cement demand by 2-3% to 38.4 million tonnes in the region.
President and chief executive Roongrote Rangsiyopash said cement demand is expected to be stronger than last year, which saw a 5% contraction to 37.5 million tonnes.
“Many megaprojects are projected to speed up very soon this year after a delay in 2017,” Mr Roongrote said.
Despite the dip in cement demand last year, SCG posted full-year revenue of 451 billion baht, up 6%, due to increasing retail prices for chemical products.
But net profit fell by 2% to 55 billion baht as SCG faced aggressive competition in the cement materials market for construction.
Moreover, the strengthening baht pressured the company’s profit.
“We are still satisfied about the 2017 financial performance despite the overall market in Asean having such high competition,” Mr Roongrote said.
He said there are many risks to the company’s business, such as the rising cost of raw materials for chemicals and packaging, price movements for oil and alternative fuel, and continued baht appreciation.
But SCG has prepared an investment budget of 60 billion baht in 2018, covering both domestic and overseas operations.
Last year, SCG spent roughly 46 billion baht.
Chaovalit Ekabut, vice-president for finance and investment and chief financial officer, said SCG’s Long Son refinery petrochemical complex (LSP) in Vietnam, worth $US 5.4 billion, will be delayed by 3-6 months from late last year because SCG and its Vietnamese partner have yet to conclude terms of finance for the project.
“SCG wants to increase its share in the project and plans to spend 20 billion baht for an initial investment in LSP in 2018,” Mr Chaovalit said.
At present, SCG holds a 71% stake and Vietnam National Oil and Gas Group owns the rest.
For Indonesia, SCG has been talking to PT Chandra Asri Petrochemical Tbk (CAP), its partner in the petrochemical business since 2011. CAP is the largest vertically integrated petrochemical company in Indonesia.
“SCG wants to invest more in CAP’s petrochemical complexes and plans to increase its stake in CAP from 30.57% now,” Mr Chaovalit said, adding that both parties aim to finalise CAP shareholding in 2018.
Siam Cement Group (SCC) shares closed yesterday on the Stock Exchange of Thailand at 502 baht, up six baht, in trade worth 1.5 billion baht.