Siam Cement sharply cuts sales growth

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A file photo of a Siam Cement factory. Reuters

BANGKOK (Reuters) – Siam Cement PCL, Thailand’s largest industrial conglomerate, has lowered its sales growth forecast for this year due to sluggish investment in the private sector, its chief executive officer said yesterday.

Siam Cement, whose earnings are widely considered a barometer of Thailand’s corporate health, now expects sales to grow 3 percent to 5 percent, rather than 5 percent to 10 percent forecast previously. Sales grew 3 percent in the first half.

“We don’t expect to reach our prior target of 5 to 10 percent sales growth due to low private-sector investment,” Roongrote Rangsiyopash said at a news conference.

Asean’s second-largest economy has yet to fully recover since an army coup in 2014 ended months of political unrest, with growth still lagging regional peers.

“Demand for cement and building materials was slow and we hope to see a recovery but don’t think it will turn positive,” Mr Roongrote said.

The firm expects domestic cement sales across the industry to contract 5 percent this year to 37 million tonnes, against an earlier forecast range of 1 percent to 3 percent growth. First-half sales in the industry fell 7 percent.

Siam Cement, 30 percent owned by the Thai royal family’s Crown Property Bureau investment arm, posted second-quarter net profit of 13.3 billion baht ($397.25 million), down 17 percent from a year earlier.

The conglomerate lowered its capital expenditure plans for this year to a range of 50 billion to 60 billion baht, from 60 billion to 70 billion baht, it said in a statement.

The firm is still studying the construction of a second petrochemical plant in Indonesia with local firm PT Chandra Asri Petrochemical Tbk and will take about a year to reach a decision, Mr Roongrote said.

In April, Siam Cement announced that it is preparing to open its third cement plant in Battambang province in 2018.

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