Thailand’s cement consumption in 2010 is forecast to pick up slightly from 24Mt this year thanks to the government’s construction projects and the economic recovery.
This is a good sign for the industry because domestic cement consumption has continually declined since 2006. Despite the expected increase next year, cement demand still accounts for only half of the country’s cement production capacity of 55 million tonnes per year.
"We forecast that cement consumption will surge by 5-7 per cent in the coming year if the government approves the budget and starts the committed construction projects. In addition, cement demand will be boosted by the market of renovated accommodations as well," said SCG Cement president Pramote Techasupatkul.
He said property developers were starting to have more confidence to continue their investments, but new construction projects such as green-field factories might recover slower than accommodations.
Siam City Cement, the country’s second largest cement producer following SCG Cement, is optimistic that cement demand in 2010 will increase two per cent from this year following the economic recovery.
It believes that cement demand has yet to recover in this quarter and will stay at the same level as the same period last year.
Under the economic challenges, both leading cement makers have seriously focused on reducing their production costs by investing billions of baht to install waste-heat generator systems in their plants.
Cement plants usually use coal as their fuel. The new systems save energy costs by generating renewable energy from the heat released from the kilns.
Chantana Sukamanont, executive vice president of Siam City Cement, said the investment in waste-heat generators would cut the company’s energy cost by 30 per cent, or around Bt500 million per year, and reduce carbon-dioxide emissions by 80,000 tonnes per year.
While the cement price in Thailand is limited by the Internal Trade Department and the production cost is higher, both companies are increasing their research and development budgets to create more high-value products.
"Competition in the cement industry is very tough. Unless we innovate our products and services, it is very difficult to survive," Chantana added.