US$150 million plant would take two years

SINGAPORE : Siam City Cement Plc (SCCC), Thailand's second-largest cement maker, is ready to build a cement plant in Cambodia costing up to US$150 million.

Managing director Philippe Arto said the company is in the final stage of a feasibility study for the one-million-tonne cement plant that will take a few months to complete. The study has shown good potential with rich deposits of limestone, a raw material for cement production, he noted. The investment cost for the project is $100-150 million.

A final decision should be made around May. A plant will take two years to build, he said."Together with our partner, I think we are ready to invest in this project," Mr Arto said.

SCCC, one-third owned by Switzerland-based Holcim, signed a memorandum of agreement with Cambodia's Chip Mong Group in December for the study.

Cambodia is a major export market of SCCC, with one million tonnes of cement being shipped annually from its Saraburi plant to serve strong demand in the neighbouring country.

Mr Arto said by 2012, SCCC also expects to start a cement plant in Burma, but it would be a cheaper investment than in Cambodia.

He added the floods in Thailand have had a relatively limited impact on business, though 20 ready-mixed cement plants around Bangkok remain closed. Two ports in Ayutthaya are also closed, hurting exports, while 800 of its 3,000 staff have been affected by the floods.

"While demand in Bangkok and the central region is down, our main markets in the northeast and the north of Thailand remain strong," he said.

Chantana Sukumanont, an executive vice-president, said SCCC's sales volume remained on course to grow by 4% this year, in line with an original forecast, with possible flat growth in the final quarter. The market in the eastern region remains strong.

Local cement demand is expected to grow 4.18% to 27.4 million tonnes this year, it noted. Demand next year will be driven by flood relief efforts and repair of roads and industrial estates.

The government does not have a concrete plan for infrastructure projects, making it difficult to predict how much the Thai market will expand next year, he said.

SCCC shares closed Friday on the Stock Exchange of Thailand at 240 baht, down 3 baht, in trade worth 8 million baht.