SCG targets limited-budget customers

The Nation

With domestic demand for cement forecast to see a drop for the fourth consecutive year in 2009, SCG Cement plans to penetrate the middle to low-end market.

"Consumers are likely to limit their budgets because of the economic downturn. Therefore, since September, we decided to offer a new cement product under the brand Super Cement for customers on a limited budget but who still want a reliable product," president Pramote Techasupatkul said.

However, SCG Cement, the country's largest cement-maker, will continue developing products to meet customer demands from high to low-end segments.

"When cement demand tends to drop significantly, we provide more choices for our customers and give the most importance to improving our service," he said.

 Cement demand in Thailand has recorded negative growth since 2006 following the country's political turmoil and the rapid changes of commodity prices, particularly oil.

Pramote believes cement demand in 2009 will drop by 10-20 per cent from around 25 million tonnes this year. He said cement demand in the first 11 months of this year declined 7-8 per cent due mainly to the US credit crunch.

"Demand in the first half had a flat growth, while in the third quarter it reported a significant drop of 15-20 per cent following the financial crisis in the US and the property industry downturn," he said.

Pramote said SCG Cement would stop exporting to Europe in 2009 and turn instead to Africa, the Middle East, South Asia and Asean. Less than 5 per cent of this year's exports went to Europe.

In 2008, it sold 60 per cent of total production in Thailand and exported the rest. He said the proportion of domestic and overseas sales in 2009 would not be much different.

The company operated at 80 per cent of total production capacity this year, but would cut down to 70 per cent in the coming year in line with the forecast of less demand.

Although it has no plan to expand production capacity, SCG Cement will spend Bt3 billion-Bt4 billion next year on its waste-heat generator and other activities to improve efficiency and reduce production costs.