Siam Cement urges political stability
The Siam Cement Group (SCG) is urging all political parties help stabilise Thai politics, saying that instability could continue to drag down the Thai economy.
Kan Trakulhoon, the president of the country’s largest industrial conglomerate, voiced his concern over Thailand’s declining competitive position caused by political upheaval.
"We have to admit the truth that the domestic market and politics are tied together," he said in an interview with the Bangkok Post.
He added that the effects of global threats including oil prices and the sub-prime crisis, were being exacerbated by Thailand’s already weak position.
"If you ask any businessmen, all the replies are the same. We only want to see political stability, then the business climate will improve in line with consumer and investor confidence," he said.
"It was quite clearly the impact of the political situation that has caused foreign direct investment in Thailand to drop sharply. Even communist countries like China and Vietnam have fared better than us.
"It is impossible for Thailand to sit tight and wait for government help to spur consumption. Confidence is needed to help drive things forward."
Siam Cement’s businesses have been healthy despite all the challenges, and at least 60% of company revenue is generated by global sales from petrochemicals, pulp and paper.
But Mr Kan said the group did not expect strong growth in Thailand for its core industries, pointing out that cement and building products had shown slow growth over the past two years.
However, the company has had difficulty earning attractive profit margins from exports due to high freight costs. Many export product markets are also saturated, further harming export prospects.
Instead, SCG was focusing on increasing its investments in neighbouring countries under its vision to be a regional company.
Mr Kan said SCG was attracted by the lucrative demand of Asean’s 560 million population, which generated THB35bn for the company this year.
He added that the company was hoping to increase its regional market share in the integrated Asean market.
"We have a few projects awaiting gradual release to the public between the first and second quarter (of 2008)."
The company sees lucrative opportunities for all of its products in Vietnam, Cambodia and Indonesia as their markets are still in the early stages of development.
"Vietnam could be our export base to markets beyond its borders," he said.
Published under Cement News
