Siam Cement may buy or build in Indonesia

Siam Cement may buy or build in Indonesia
Published: 24 August 2006

Siam Cement may invest as much as US$200m to build or acquire a plant to make the building material in Indonesia as growth slows at home in Thailand. Siam Cement, Thailand’s biggest cement and petrochemical maker, plans to  invest the money in the next two years, and is in talks with Indonesian companies, President Kan Trakulhoon said, without disclosing names.

Siam Cement, which was started by Thailand’s King Vajiravudh in 1913, wants to tap an expected rise in demand for the building material as President Susilo Bambang Yudhoyono’s Indonesian government prepares to spend US$150 billion by 2009 on roads, ports and power plants.

“The cement industry in Indonesia is better than in Thailand and companies have the ability to raise the cement prices,’’ said Itphong Saengtubtim, an analyst at CIMB-GK Securities Pte in Bangkok. “Margins for cement producers this year has been hit hard because of rising energy costs.’’

Indonesia currently has capacity to produce 45.2Mt of cement a year. Siam Cement has an annual capacity of 22Mt and is producing at about 70 per cent of capacity.

“We are looking for more investment in building materials, cement and also in petrochemicals,’’ Kan said. “We can work together with an existing company or even to have a green field plant. We are still evaluating.’’