Siam Cement to take a hit from Map Ta Phut

Siam Cement to take a hit from Map Ta Phut
Published: 21 December 2009

Siam Cement, Thailand’s biggest industrial conglomerate, expects the suspension of 18 of its projects at Map Ta Phut industrial estate to hurt earnings next year but says the problems will not affect investment. On Dec. 2 a Thai court halted 65 out of 76 new projects at the estate, home to the world’s eighth-biggest petrochemicals hub, due to environmental concerns.

"It will affect (our earnings) and the extent will depend on how long things are delayed," Siam Cement’s finance chief, Roongrote Rangsiyopash, told Reuters in an interview on Monday.

"We’re waiting for court clarification. Our projects will be delayed. For how long? I think it will depend on the government," he said.

The government has set up a panel to examine how to get the suspended plants working but some analysts fear it could take many months.

Most of Siam Cement’s 18 suspended projects, worth a combined 57.5 billion baht ($1.73 billion), are downstream petrochemical operations due to be completed over the next one to two years and then make high-value-added products, Roongrote said.

Dow Chemical , Mitsubishi Rayon and Mitsui Chemical were among foreign investors in the suspended projects.

Siam Cement’s largest project in the Map Ta Phut district, a second, $1.25 billion olefins cracker, was not among the suspended projects and would be completed as scheduled in February or March, Roongrote said.

The new upstream naphtha cracker with production capacity of 1.7Mt is a joint venture with Dow Chemical, which owns 33 per cent, and is one of the group’s largest investments in recent years.

However, Roongrote said the running of the new cracker would be affected by the downstream suspensions.

"The new olefins cracker will not be able to run at its full efficiency. It will take time and we will need to adjust our sales plan," he said.