Thai demand expected to return to pre-recession levels

Thai demand expected to return to pre-recession levels
Published: 21 January 2011

Thailand cement consumption is expected to grow by nearly 10% this year to return to pre-recession levels even though demand is likely to slow in the property sector, says Siam City Cement Plc (SCCC).

Thailand’s second-largest cement manufacturer said construction of the Purple and Red mass-transit train lines would drive demand to increase in 2011 from about 25Mt last year.

But speculation in the property sector, in which a large number of condominiums were built in 2010, will recede somewhat this year because of oversupply, said Philippe Arto, managing director of SCCC.

"For us, the industry’s growth is quite good. Overall, the mood is optimistic," said Mr Arto, but he noted the country’s exports, exchange rate, and energy prices might negatively affect the economy and also cement demand this year.

The company has secured coal supply from several contracts in the past six months. This will help soften the impact of rising coal prices driven by the severe floods in Australia, the world’s largest coal exporter, he added.

SCCC, which is one-third owned by Switzerland-based Holcim, is studying the feasibility of building cement plants in Cambodia and Dawei in Burma in terms of demand and potential local partners.

The company expects to make a decision on Cambodia this year while a Burma decision should take 12 to 18 months to finalise, he said.

"Demand in Burma and Cambodia is growing faster than in the Thai market," Mr Arto said. "I think that in five years, it is possible for us to have factories in both countries with a capacity of 1Mt to 1.5Mt."