Siam Cement Group (SCG), Thailand’s largest cement producer, has reported that Cambodia and Indonesia are the top markets in Southeast Asia in terms of the company’s economic performance, with the construction boom in the kingdom playing a significant part in SCG’s bottom-line during the first nine months of the year.
According to SCG’s consolidated financial results, released on Wednesday, during the January-September period, revenue from sales increased two percent to reach $3.9 billion, mostly the result of the expansion of operations within Asean.
However, the company also reported a decrease in earnings before interest, taxes, depreciation, and amortisation (EBITDA) of six percent, or $525 million, following waning demand in Thailand.
SCG’s robust performance in Cambodian and Indonesia during the first nine months of 2017 was driven mostly by a hike in demand for grey cement in both countries, with rise in demand for the construction material reaching six percent in Cambodia and seven percent in Indonesia.
By contrast, demand for the concrete component decreased in most other Asean markets.
Roongrote Rangsiyopash, the president and CEO of SCG, said the Asean market continues to be his company’s main target for investment and portfolio diversification.
“In Asean we continue to implement strategies and continue solidifying the SCG brand,” said Mr Roongrote.
“SCG believes this market has high potential with dynamic growth from the governments’ investment policies as well as strong domestic consumption and trade among Asean countries.”
According to data from the Ministry of Land Management, investment in Cambodia’s construction industry during the first nine months of the year reached $5.63 billion, a rise of 22 percent from last year.
Demand for cement in Cambodia is placed at four million tonnes per year, with Kampot Cement – the largest cement producer in Cambodia – having a capacity of only two million tonnes per year, or about half the total demand in the country.
SCG owns a majority stake at Kampot Cement, a company set up in 2008 as a joint venture between the Thai cement giant, which owns 90 percent of the company, and domestic conglomerate Khaou Chuly Group.
Kampot Cement’s annual production capacity was initially 1.1 million tonnes. SCG invested $120 million into a second production line, which came online on 2016 with an annual capacity of 900,000 tonnes.
A third plant in Battambang province is in the pipeline, which will be able to produce 1.8 million tonnes of cement per year.