The Thai cement industry is waiting to see more details of the government’s programme for infrastructure projects in the new year before it can determine whether growth of this sector will exceed the normal annual rate of 3-5 per cent.
The government so far has not laid out clear plans on repairing the flood damage to roads and other infrastructure, or for how it intends to bolster the Kingdom’s disaster-protection system with floodways or drainage tunnels.
Kan Trakulhoon, president and chief executive officer of Siam Cement Group, Thailand’s largest cement-maker, said demand for the product next year was anticipated to grow by 5 per cent, a rate that was also expected to continue for several years thanks to the demand for repairs to roads, houses and other buildings, as well as improving the flood-protection system and constructing new homes.
However, it has to wait for an outline of new infrastructure projects from the government before making a clear forecast of cement demand in 2012 and over the next few years.
He said sales of building materials had bright growth prospects after the flood water recedes. Inundated houses need new materials for restoration. There will also be more demand for materials such as cement that are less susceptible to flood damage than wood.
"Because of the floods, the demand for high-rise condominiums in central Bangkok will be higher. I have always believed that the number of high-rise residences such as condominiums has not reached the saturation point. So I have an optimistic view that demand for cement will keep growing."
Kan pointed to the overall improved sales of building materials and cement in October as evidence for his optimism. In that month, sales of cement in the Central region dropped by 40 per cent; however, sales in the North, South and Northeast were good.
Chantana Sukhumanont, executive vice president of Siam City Cement, the country’s second-largest cement producer, said cement consumption in 2012 would not grow significantly from house and other building restoration, as repairs do not require a lot of the product.
Most of the demand will be for other building materials such as plumbing fixtures, paint and pipes as well as furnishings.
She said Thailand’s annual cement-production capacity was 50Mt, of which 30Mt were for domestic consumption and the rest for export.
"The cement supply is sufficient. If domestic demand is higher than the normal level of 30Mt, cement makers can switch from exports to serve the domestic market," she said.
Source: The Nation