Siam Gypsum foresees slow growth in ’06

Siam Gypsum foresees slow growth in ’06
Published: 16 February 2006

Siam Gypsum Industry (Saraburi), the country’s leading gypsum-board manufacturer, projected that the domestic consumption of gypsum products would decline further this year, in line with the slowdown of the residential property market, managing director Olivier Guilluy said.  The firm, a joint venture between Siam Cement and Lafarge Boral Gypsum Asia (LBGA), forecast that the domestic gypsum-board market this year would grow by 10% to 56 million sq m, down from 15% last year, and 20% in 2002.   The slow growth is in line with the declining demand of gypsum main users in the residential market, due to the impact of rising energy costs and interest rates.  
 
The residential market, accounting for over 70% of the country’s gypsum consumption, is expected to mainly be driven by the government’s low-budget Ua-arthorn housing projects.  As a result, Guilluy said, the company’s sales growth was expected to be on a par with that of the residential market. Last year, it reported revenue of nearly three billion baht, up 15% from 2004.  
 
"Over the next five years, the domestic gypsum market will be driven by commercial buildings," Guilluy said.  To cope with rising demand from this segment, the company has resumed production at its facility in the Navanakorn Industrial Estate, Pathum Thani, with a small investment of two million baht. The move will raise its total capacity to 100 million sq m annually from 80 million sq m to serve both the local and export markets.  
 
Export markets will also become its focus, given Thailand’s status as one of the world’s strongest exporters of gypsum products. This year it plans to ship around 40 million sq m worldwide, up from 30 million sq m last year.  Mr Guilluy said the company’s exports of gypsum products over the next five years would not exceed 50 million sq m due to the higher transport costs and an increasing supply from new gypsum manufacturing plants in many countries.  LBGA also has a plan to invest in a production of 10 million sq m a year to serve demand in Ho Chi Minh, Vietnam.