SCG anticipates challenging 2016 start

 SCG anticipates challenging 2016 start
Published: 02 December 2015

Next year is expected be challenging for Siam Cement Group’s Cement and Building Materials, as the domestic market is facing the threat of new supply, according to management.

Bualuang Securities hosted the SCG Dinner Talk on Friday, the key speakers of which were SCC's next CEO, Roongrote Rangsiyopash (effective January 2016), and CFO, Chaovalit Ekabut.

During the event, management said domestic demand for cement in 1H16 is not expected to grow strongly enough to absorb new supply from TPI Polene which is launching a new line. Cement prices should soften, but the group believes that a price war would not happen given that all cement producers are running at nearly full utilisation rates. SCC will put priority on margin rather than market share.

It also emerged that there might be some hiccup on the demand side in Myanmar as many investments are likely to be put on hold until there is a clear picture on Naypyidaw's policies. However, management believes that ongoing construction in Myanmar should underpin demand to continue growing. There would be no impact on its cement plant, as the new capacity of 1.8Mta is still less than SCC's export volume of 2.3Mta to Myanmar this year. (Source: The Nation)