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Published on August 18, 2007

It currently imports 1.4 million tonnes of coal from several countries, including Indonesia, Australia and Vietnam. It plans to boost imported coal to three million tonnes next year and six million tonnes by 2012.

"Energy will become much more necessary worldwide. If we do not secure this resource, we will face tough competition in the future," said managing director Kalin Sarasin.

Coal imports account for 10 per cent to 15 per cent of total revenue and are expected to rise to 20 per cent in the next five years, he said. To add value, the company established coal hubs to manage stock for customers. It has three centres: in Ayutthaya, the Philippines and Cambodia, and will build another in Vietnam.

Apart from recycling waste paper, the company is seeking opportunities to generate income from recycling by moving into scrap steel and other non-ferrous metals.

It will start recycling stations in Vietnam, Cambodia and Thailand within the year. It already has plants in Laos, the Philippines and Cambodia.

Of total revenue, it generates 27 per cent from imports, 54 per cent from exports and 19 per cent offshore. It plans to increase the proportion of offshore trading to 30 per cent by 2012 because of more efficient networks around the world.

Kalin said the company tried other business models to support local small and medium-sized operators in the steel industry by importing raw materials from China, reprocessing it at their plants and helping them export value-added products to European countries.

"Suppliers, manufacturers and customers are satisfied with this strategy, especially local operators. It is easier for them to penetrate international markets," he said. "In the future, this may be our main strategy for the domestic market."

Meanwhile, the company has shifted market emphasis from the United States to the Middle East, Africa and southern Europe. This reduces pressure on export and offshore income, which has been threatened by strong baht-to-dollar rates.

The strategy will cushion the impact from any economic downturn in the US.

"Our exports to the US this year are lower than one million tonnes, declining from 1.5 million tonnes to two million tonnes in past years," he added.

Siam Cement Trading plans to expand distribution networks in Guangxi province and Nanning city in southern China and to establish offices in Surabaya, Banjarmasin and Samarinda cities in Indonesia this year.

It will also increase trading posts in Africa, Eastern Europe, Russia and the eastern region of India.

Company sales in the first half were Bt23.7 billion, an increase of 38 per cent from the same period last year due to diversification of product lines and the markets in which it was active.

It aims to reach 40-per-cent growth for the whole year, due mainly to the energy and recycling businesses, he added.

"We need to grow at least 20 per cent every year to achieve the revenues we have committed to the board," Kalin said.

Chalida Ekvitthayavechnukul

The Nation