Siam Cement unit sees sales growing 20% on rising demand

Siam Cement unit sees sales growing 20% on rising demand
Published: 21 February 2007

Cementhai Logistics Co , the logistics arm of the Siam Cement Group, projects its sales to rise 20% this year from 7.6 billion baht last year.

The company aimed to achieve 10 billion baht in revenue next year and 15 billion baht in 2011, according to managing director Bhanumas Srisukh.

Driven by the significant growth of logistics services demand in recent years, he said, SCG-CTL’s sales in 2006 had tripled from 2.39 billion baht in 2000.

Despite political and economic uncertainty, the company was confident in its sales growth target of 20% this year, helped in part by a government initiative to promote multi-modal transport.

SCG-CTL targets 10 billion baht in revenue next year, says managing director Bhanumas Srisukh.

Mr Bhanumas said the approach was intended to maximise the utilisation of all local transport systems, particularly railways.

The government had asked businesses to embrace the strategy by using more rail transport, instead of focusing mainly on trucks, he added.

As a result, SCG-CTL would adopt the strategy for its logistics system, aiming to provide more cost-efficient transport. The company will increase its rail logistics and marine transport services, for which costs are much cheaper than for trucks.

Based on official statistics, transport by truck consumes seven litres of diesel fuel per tonne per kilometre while rail transport consumes three litres and ship transport two litres.

More than 75% of SCG-CTL’s total sales are generated by truck transport services and 70% of total sales come from servicing businesses under Siam Cement, the country’s largest industrial conglomerate.

"Using more transport modes will enhance our efficiency in cost management, and allow us to be more flexible in using a wider network," Mr Bhanumas said.

To ensure business expansion in marine transport, the company recently acquired a 27% stake in Jumbo Barge and Tugs, a local ship operator, for 100 million baht.

"This is one of our key strategies. We are experts in management systems, while our partner specialises in the vessel business, so we will consolidate our strengths," he said.

In addition, the company has set aside a budget of 200 million baht to construct a coal-stack port and other facilities. The port is expected to be located in a southwestern province.

The company is also expanding to meet the growing needs of its sister businesses by setting up logistics networks in Indochina.

The company has established subsidiaries, including CTL-Vietnam Co in Ho Chi Minh City and CTL-Cambodia in Cambodia, where the Siam Cement Group has cement and building-material production plants.

"We will go where SCG has investments so that our business will grow parallel with the group," he said.

Mr Bhanumas said Indochina had strong potential for the logistics business as the countries were still underdeveloped and needed investors to help expand various transport networks.

Currently, the company has fleet of 6,000 trucks and 400 marine vessels.