Sunday, August 19, 2007

CONSTRUCTION MATERIALS / SIAM CEMENT GROUP

Asia and Africa fuel gains for SCG unit

YUTHANA PRAIWAN

Siam Cement Trading Co is increasingly upbeat about its business prospects for the rest of this year, buoyed by an impressive performance in the first six months. Sales in the first half of this year rose 38% year-on-year to 23.7 billion baht, driven by the diversification of product lines and markets, said managing director Kalin Sarasin.

The trading arm of the Siam Cement Group (SCG) expects to achieve full-year sales of 48 billion baht, a gain of 40% from last year, due to substantial increases in Asia and Africa.

Sales are projected to reach 100 billion baht by 2011, Mr Kalin said.

About 54% of the company's sales now come from exports, 27% from imports and the remaining 19% from international trading by its offshore branches. The sales ratio for goods and products made by SCG subsidiaries and those outside SCG is 40:60.

Key exports include cement, building materials and tapioca, while the main imports are aluminium, coal, steel scrap and waste paper.

The company this year expects to import 1.4 million tonnes of coal, mainly from Indonesia, Australia and Vietnam. It forecasts imports to reach three million tons next year and six million in 2011.

Currently, the company has six offices in China and plans to add units in Guangxi and Nanning. It also operates three offices in Indonesia.

It also aims to increase the number of posts in Africa, Eastern Europe, Russia and eastern India to improve access to raw materials and the finished goods needed by the company's customers.

Mr Kalin said the company intended to increase upstream sourcing of raw materials for SCG's paper business. Imports of waste paper account for more than 60% of total imported raw materials.

Recently, the company entered into a joint-venture agreement with Greenkraft Corporation to set up five bailing stations in the Philippines to supply raw materials for the SCG paper plant there.

Apart from waste paper, the company plans to recycle and re-use steel, plastic and other non-ferrous scrap in the future. It has established recycling stations in Laos, the Philippines, Poipet in Cambodia. Three more facilities in Vietnam, Phnom Penh and Thailand are expected to start operations by 2008.

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