Fitch lowers ratings on Siam Cement

Fitch lowers ratings on Siam Cement
Published: 10 April 2008

Fitch Ratings Ltd on Wednesday revised its rating outlook on Siam Cement Public Co Ltd, Thailand’s largest industrial group, from stable to negative.

"The revision of the rating outlook is based on the weakening in SCC’s business fundamentals in its core businesses due to higher raw materials and energy costs, overcapacity and uncertain global demand, which could further weaken its financial performance and margins as well as reduce its financial flexibility," the credit rating agency said.

The poor business outlook comes at a time when Siam Cement has committed THB57bn (US$1.8bn) in investments to expanding capacity through 2010.

"In addition, a weakening global macroeconomic environment, led by the impact from a US recession, will likely intensify and extend the downcycle of its core businesses, particularly petrochemicals," Fitch said.