SIAM CEMENT GROUP (SCG) is studying expanding in the Eastern Economic Corridor (EEC) through three core businesses – petrochemicals, packaging, and building materials – with the focus on innovative products.
“We are looking at the incentives and the infrastructure around the project before making a decision on investing in EEC. This may be ready when the government announces its investment to develop infrastructure in this area,” said Roongrote Rangsiyopash, president and chief executive officer of SCG.
The group is also branching out into Asean countries, with its eye on the petrochemical industries in Vietnam and Indonesia.
The group had budgeted Bt15.3 billion for Asean in the first quarter of this year, with almost all going to its cement business in Vietnam – Vietnam Construction Materials JSC.
About Bt300 million was earmarked for its packaging business, Indocorr, in Indonesia.
Its total 2017 capital-expenditure budget is up to Bt70 billion.
As the next step in Asean, the group will finalise its further investment in Vietnam’s first integrated petrochemical complex by midyear.
It currently holds 71 per cent of the Long Son Petrochemicals project.
Construction will commence at the end of this year and the project will be completed for commercial operations in 2022.
In Indonesia, the group is studying a second petrochemical plant with its partner, Chandra Asri Petrochemical. The group holds 30.57 per cent via SCG Chemicals Co in the first |plant.
The deal for the second plant may be finalised at the end of this year or next year.
“We believe that our investment in Asean will be a part of our drive for sustainable business growth for the long term,” Roongrote said.
Of the group’s Bt562.17 billion assets, Bt137.14 billion are in Asean.
SCG is standing by its growth forecast of 5-10 per cent this year after logging first-quarter increases of 6 per cent in sales to Bt116.26 billion and 29 per cent in net profit Bt17.38 billion from the same quarter of last year.
Both the petrochemical and the packaging businesses were in a healthy upcycle in the quarter.
Petrochemical sales rose 14 per cent to Bt54.27 billion, while net profit soared 49 per cent to Bt13.36 billion.
Packaging sales climbed 5 per cent to Bt19.84 billion and net profit gained 8 per cent to 1.69 billion.
However, its cement and building-materials businesses showed signs of slowing when the overall market contracted by about 7 per cent after the private sector delayed investment and the government delayed infrastructure projects.
The group’s cement and building-materials sales declined by 2 per cent to Bt44.82 billion and net profit shrank 25 per cent to Bt2.46 billion.
Up to 23 per cent (Bt25.91 billion) of its sales in the first quarter came from its operations in Asean and its exports to Asean.