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Published on December 22, 2007

Chantana Sukumanont, Siam City Cement's executive vice president for customer relationships, said the company estimated domestic sales would be maintained at 28 million tonnes in 2008, the same as this year. The main demand will come from residential projects and existing infrastructure projects.

"Our estimate is based on no approvals for new mega-infrastructure projects next year. However, if the new government speeds up approval of mega-projects worth up to Bt165 billion in 2008, domestic demand for cement will increase," she said.

This year, Thailand's cement production will reach 45.5 million tonnes or about 80 per cent of the production capacity of the industry of 56.3 million tonnes, with 28 million tonnes for the domestic market - a drop of 4 per cent from last year. The remaining 17.5 million tonnes was for export - up 19 per cent on last year.

Chantana said the global economy showed signs of slight growth next year in view of the fall in the US property market following the sub-prime loan problem.

The company therefore believes demand for cement in the export market will drop next year.

With the market trend, Siam City Cement, producing the Insee brand, will reduce its exports from 6.1 million tonnes this year to only 4.1 million tonnes next year, while maintaining its domestic sales of 7.6 million tonnes in 2008.

Its main export market will be Vietnam, which recorded about 37 per cent of the firm's export value, followed by Bangladesh and Singapore.

Chantana said Vietnam, with strong economic growth, had high demand for cement this year and this would continue next year. As a result, the company will focus on Vietnam next year.

"We accept our sales in 2008 in terms of volume will drop compared to this year, but in terms of value and net profit next year may be better, as we have reduced our production costs and developed innovative products to match customers' demands," she said.

Earlier, the firm announced plans to cut costs by shutting down kilns to reduce its production from 12.3 million tonnes this year to 10.4 million tonnes in 2008. The company also has an early-retirement programme to reduce staff numbers.

Somluck Srimalee

 The Nation