Siam City Cement Plc is to ask the government to raise the retail price of cement by Bt1-2 per bag. SCCC’s senior marketing vice president Chantana Sukumanont yesterday told a press conference that the company - Thailand’s second largest cement producer - was shouldering a 15-per-cent increase in cash costs because of higher energy prices. Fuel and electricity account for a combined 70 per cent of the firm’s production costs, she said. Chantana noted prices of cement - which are controlled by the Commerce Ministry - hadn’t changed in two years and were still Bt500 lower than the ceiling set by the government. She also said inflation was expected to reach four per cent soon, a worrisome level that would eat into consumers’ buying power.
"The government has no other choice but to implement its Bt1.7 trillion worth of infrastructure projects to stimulate the economy. These projects are a must," she said, referring to Prime Minister Thaksin Shinawatra’s five-year investment programme that includes building new mass-transit routes, roads, and water and electricity infrastructure. SCCC expects 56 per cent of the mega-investment projects to involve the use of cement.
Chantana said cement exports had begun to recover and SCCC had targeted cement exports of 4Mt this year and domestic sales of 8.5Mt. Of the total industry capacity of 54Mt annually, domestic demand is forecast at 28Mt this year - an increase of 10 per cent - while exports are expected to climb to 12Mt, representing a seven per cent increase. That leaves excess capacity of a 14Mt.