The building-materials arm of the Siam Cement Group (SCG) will ask the conglomerate’s board to lower its revenue target for this year, Pichit Maipoom, the president of Cementhai Building Products, the holding company for the SCG’s construction-material interests, said yesterday.
At the beginning of the year, it targeted Bt23bn to Bt24bn in revenues, up from Bt22bn last year. This target was based on the assumption that the property market would grow three per cent this year, but it
contracted seven per cent in the first quarter.
"We have to work very hard this year to reach revenues of Bt20bn due to the country’s economic slow-down and the baht’s strength," Pichit said.
He said lower interest rates would not spur the construction business because the rainy season is approaching and it would be unreasonable to expect revenues in the fourth quarter to make up for three quarters of declines.
In the first quarter, revenues shrank five per cent from the final quarter of last year and profits declined more than Bt100m from the same period in 2006.
Pichit said one of the company’s strategies was to sell more high-value products in neighbouring countries, particularly Vietnam. It has already set up a fibre-cement plant there and will concentrate on marketing and increasing the number of distributors this year.
Meanwhile, its unit Siam Fibre-Cement yesterday said it would replace asbestos with cellulose and synthetic fibre.
"Many countries, such as the United States, Australia, Japan and Vietnam have removed asbestos from their manufacturing process because it is assumed it may harm human health," Pichit said.
"We have to spend more than Bt3bn to develop our production technology. This is partly to bring us in line with the group’s vision of becoming a regional leader," he added.