High fuel costs and a slow down in the economy will affect Siam Cement’s performance this year, a report in Krungthep Turakij said. Although demand for cement rose three per cent in the first quarter, Siam Cement predicts that its sales income this year will rise less than expected because many construction projects have been postponed.
Rising fuel costs have had a significant impact on Siam Cement’s business. The company is investing in energy conservation technology. For instance, the paper mill has been converted to run on coal instead of fuel oil, for a cost of about two billion baht. This has helped reduce fuel costs by about 20 per cent.
As for changes in the currency exchange rate, this factor will have very little impact on Siam Cement. Foreign loans account for less than one per cent of the company’s entire debt and they have already taken risk management measures.