SCG hopes to lure Indonesian market with new products

Corporate June 13, 2014 00:00

By The Jakarta Post
Asia News

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Siam Cement Group is ready to introduce the Indonesian market to its three flagship products, which are made at the company's newly established cement plant in Karawang, West Java.

Atthapol Phongcharoensuk, branding and marketing manager of SCG Cement-Building Materials, said the company was ready to present three new products that he claims to be innovative materials, to cater to Jakarta’s construction industry as its initial market.
The products are the energy-saving lightweight concrete SCG Smartblock, the quick-to-dry Portland composite cement SCG Cement PCC, and the ready-mixed concrete Jayamix by SCG Super Concrete.
The SCG Smartblock, Atthapol said, was produced by the Thai giant’s newly established concrete plant in Karawang, which began operations in April with a production capacity of 450,000 cubic metres per annum.
“SCG Smartblock is our very first lightweight concrete product that uses our own SCG brand in the Asean market,” he said.
The company claims that the concrete can save 30 per cent of a home’s energy usage with its ability to block heat.
SCG Cement PCC, meanwhile, will be produced by the company’s Sukabumi plant – also in West Java – which is expected to commence commercial operations in the third quarter of next year. The plant, with a capacity of 1.8 million tonnes per year, will be run by SCG’s wholly owned subsidiary Semen Jawa, with investment totalling US$356 million (Bt11.5 billion).
Atthapol said that before the facility’s completion, the company would import the product from Thailand and was planning to bring in 30,000 tonnes of the Portland cement in its first shipment.
The company also aims to launch Jayamix by SCG Super Concrete next month, hoping to market 30,000 cubic metres of the product before year-end. The concrete will be produced by Jaya Readymix, an Indonesian company that was fully acquired by SCG in 2012, marking the Thai firm’s venture into Indonesia’s cement business.
SCG plans to invest roughly $7 billion over the next five years, more than half of which will go outside Thailand, with Indonesia becoming its main expansion focus.
SCG’s portfolio includes holdings in several companies in Indonesia. The company, through SCG Building Materials Co, holds a 96.31-per-cent stake in Jakarta-listed Keramika Indonesia Assosiai. SCG, through SCG Chemicals Co, also holds a 30.03-per-cent stake in Chandra Asri Petrochemical.
Atthapol said that in the past two years alone, the company had disbursed about $1 billion of its Indonesian investment, which includes acquiring packaging company Primacorr Mandiri late last year with a total investment of $12.4 million.
He added that Indonesia was the largest contributor to SCG’s regional building-materials revenue, contributing about 30 per cent of the total figure.
This year, he said, the company aims to have its Indonesian revenue rise by 15 per cent, having also included the country’s projected slowdown in the construction business during the election year.
Last year, SCG Indonesia booked an 8-per-cent year-on-year increase in revenue to 4.49 trillion rupiah (Bt12.3 billion). Its assets rose by 17 per cent to 13.1 trillion rupiah thanks to its Sukabumi, Primacorr and Chandra Asri investments.
Atthapol said the company hoped to be Indonesia’s leading provider of cement and building materials, while acknowledging that it faces stiff competition from well-established local players such as state-run giant Semen Indonesia.
Cement associations have predicted that Indonesia’s construction-related industry this year will increase national cement consumption by about 6 per cent from the 2013 level.