Thailand: supply crunch and floods force SCG to close units

Thailand: supply crunch and floods force SCG to close units
Published: 21 October 2011

Siam Cement Group (SCG), Thailand’s top industrial conglomerate, says its building-materials and paper plants have begun shutting down due to logistics problems and raw material shortages. The closures are in addition to those at some flood-hit joint ventures in Pathum Thani and Ayutthaya.

Production at Siam Cement (Ta Luang) in Saraburi province has been suspended since 12 October, while Siam Fibre-Cement Co at the same location and the fibre-cement roof producer Fibre-Cement Products (Lampang) partially shut down on that same day.

The temporary closures resulted from inadequate raw material supplies, the group said in a filing to the Stock Exchange of Thailand (SET) yesterday.

Meanwhile, the SET-listed Quality Construction Products Plc, a lightweight-concrete joint venture of SCG and located in Ayutthaya’s Bang Pa-in Industrial Estate, has been inundated, forcing operations to be halted since last week.

Kan Trakulhoon, SCG’s president and chief executive, said the flooding should eat into no more than 3% of SCG’s combined sales and the company remains confident that revenue will show growth over last year.

"We’re evaluating the effects on the cement market, in which demand grew by only 3% YoY in the first half," he said.

Demand for cement and other building materials should recover in the latter part of this year’s fourth quarter or in next year’s first quarter, depending on when the floodwaters recede.

He added that SCG and its subsidiaries carried full flood insurance coverage.