Siam Cement Group (SCG), Thailand's largest industrial conglomerate, is optimistic that its 2010 sale revenue this year could expand 2025 per cent, well beyond the earlier target of 10 per cent, thanks to the continued increase in demand for chemical products, paper and cement.
At a press conference yesterday, president and chief executive Kan Trakulhoon did not hide his satisfaction when announcing record sales growth of 30 per cent to Bt146 billion in the first half.
"Demand for chemical products, paper and cement, both domestically and internationally, should continue through the rest of this year," Kan said.
However, he acknowledged that sale growth in the second half might not be as impressive as in the first half, as SCG - like other companies - started to witness business recovery in the second half of last year.
SCG generated sales of Bt250.156 billion in 2009. It earlier targeted its sales this year to increase by 10 per cent.
Kan is also optimistic that some of SCG's suspended projects in Map Ta Phut might resume activities this year if the company can complete the process under Article 67 (2) of the Constitution within five months. Most of them are jointinvestment projects with partners such as Dow Chemical.
SCG has already completed environmental and health impact assessments (EHIAs) of 11 suspended projects it considered to be the important ones to proceed with.
The company has 20 suspended projects in the Map Ta Phut industrial estate in Rayong worth a combined Bt57.5 billion, of which 15 projects started construction after the Constitution was promulgated. It has decided to postpone some projects it foresees as unnecessary at the moment.
The 11 projects it wants to go ahead with will be submitted to specialists in relevant fields for comments, public hearings will be organised, and then the projects will be submitted to the Environment Independent Committee for review. The total process is expected to take five months.
Concerning the group's performance in the second half, Kan expected cement consumption to continue heading upward, particularly from construction projects upcountry. Meanwhile, demand for paper from the domestic and Asian markets is also increasing. However, selling prices of cement and paper in the second half are not likely to be as high as in the first half, he said.
SCG expects total cement production this year to be 26 million to 27 million tonnes, up nearly 10 per cent from last year. SCG has about a 39percent share in the domestic cement market. It exported 3.7 million tonnes in the first six months of this year and expects to distribute 3.9 million tonnes in the second half, similar to the same period of last year.
The paper price hit a high in the second quarter of US$470 (Bt15,160) per tonne and has since declined to $460. Highdensity polyethylene (HDPE) has dropped from roughly $600 per tonne to $400 and is likely to maintain this level for the rest of the year because of new capacity in the world market.
Kan said SCG generated sales of Bt77.371 billion in the second quarter, an increase of 36 per cent year on year and 13 per cent onquarter. It posted consolidated net profit of Bt7.295 billion, growing by 7 per cent onyear and 6 per cent onquarter from the earnings growth of the paper business and increased dividend income from other companies within SCG investment portfolio.
SCG Chemicals booked net sales of Bt38.057 billion, increasing by 63 per cent year on year and 31 per cent onquarter. SCG Paper posted net sales of Bt12.781 billion, while SCG Cement generated sales of Bt12.033 billion. This was the first quarter that sales of paper exceeded those of cement.
SCG's board of directors approved paying an interim dividend of Bt4.5 per share for the first half's operating result. The board also approved the issuance of fouryear debentures worth a maximum Bt5 billion to replace the maturing debenture in October.