Consumption in Thailand to rebound on building reconstructions

President Pramote Techasupatkul said the government should act quickly and accelerate infrastructure projects after suspending some in last year's fourth quarter when severe flooding hit Bangkok. "Consumption in the commercial segment is expected to rebound substantially on reconstruction of buildings and industries after the floods," said Mr Pramote.

He said while home repair activity has risen during these past two months, it requires only a small amount of cement.

"We expect that demand from the residential market will recover slowly over the next six to 12 months, especially in areas that were inundated last year, as consumers have grown more choosy about home locations for fear of further flooding," he said.

Siam Cement Group (SCG) expects a moderate 4-5% increase in cement sales this year on forecasts that demand in the residential market will remain slow over the next 6-12 months as homebuyers delay their decisions due to flood concerns.

Thailand's top industrial conglomerate manufactured 23.2Mt of cement last year, including 6.5Mt for export. Domestic consumption totalled 27.3Mt, up by 3% from 2010. Mr Pramote said the subsidiary is now running all its factories nationwide at 85-90% capacity to serve expected growth in both domestic and export sales. The group has set an export sales target of 7Mt this year, up from 6.5Mt shipped last year.

Sanit Kessuwan, the managing director of Siam Cement (Lampang), said his unit expects its production will increase to 1.98Mt this year from 1.88Mt last year. The only cement plant in the north, Lampang has a maximum capacity of 2.1Mta.