Thailand’s largest industrial conglomerate and the majority shareholder in Kampot Cement, Siam Cement Group (SCG), is expanding production capacity and diversifying its product line to tap opportunities in Cambodia’s “booming” construction industry, its president and CEO Kan Trakulhoon told Khmer Times late last week.
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Mr. Kan is enthusiastic about Cambodia’s economy and said this was reinforced by a recent visit. “Right now I can [still] feel it because I just visited Phnom Penh,” he said during an interview in Bangkok. He took many young executives in his company with him so that they could see Cambodia firsthand, he said. “We spent two to three nights over there and visited all the construction sites – booming.”
The company plans to invest an additional $300 million in Cambodia over the next five years, according to its strategic plan. Mr. Kan said that SCG plans to deliver the same full range of services and products in Cambodia that it does in Thailand, saying it will operate in Cambodia the same way it does at home. “The same way exactly,” he stressed.
“Cambodia’s [construction] market is booming. Everything looks very rosy so we are very happy,” Mr. Kan said. “The second line of our cement plant – Kampot Cement – started in June and already started commercialization… We will launch all the products one by one in the market, and not only in Phnom Penh, but also some bigger cities… This is the plan,” Mr. Kan said. “We have been in the Cambodian market for more than 20 years. Now, we are growing fast and will beef up to provide more and more innovative products,” he added.
Kampot Cement was set up in January 2008 as a joint venture between SCG, which owns 90 percent of the company, and domestic firm Khaou Chuly Group. Initially, its annual production capacity was about 1.1 million tons. SCG invested $120 million in the second production line, which has annual production capacity of 900,000 tons.
Po Eav Kong, managing director of Asia Real Estate Cambodia, told Khmer Times that SCG’s expansion reflects increasing demand in the construction market in Cambodia and will help reduce imports. “We see that the construction sector is booming – not only housing but also infrastructure. I believe the industry will keep firm as we are at the stage of rising to the middle class, so people are changing from building wooden houses to concrete ones,” Mr. Kong said.
“[SCG’s] expansion is not only good for business but will also help reduce imports. It is really good for our economy,” he added.
Cement demand in Cambodia is estimated at 4 million tons per year. Kampot Cement’s total capacity of 2 million tons per year represents half of country’s total demand.
Cambodia attracted more than $1.432 billion of investment in construction during the first eight months of the year, with 1,294 projects, according to the Ministry of Land Management and Urban Planning.
Although SCG is expanding in ASEAN, Mr. Kan said the market is small. “I have to admit that the market in ASEAN outside Thailand is still quite small, but I would say we have seen the trend, a big trend coming,” he said.
In the first nine months of this year, SCG reported revenue from sales in Cambodia of 453 billion riel ($108 million) – up 20 percent year on year.