SIAM CEMENT GROUP’S board of directors is expected in August to approve a plan to invest US$420 million (Bt13.15 billion) in a new cement plant in Myanmar, indicating its confidence in the economic potential of Asean.
“Despite concerns of lower economic growth in Asean, we’re still confident that it’s a promising region. In August, the board of directors is expected to approve the plan to invest $420 million in a cement plant in Myanmar. We will also complete a list of target companies for mergers and acquisitions,” said SCG president and chief executive Kan Trakulhoon.
He noted that the board would also review the firm’s five-year, Bt200-billion investment plan (2014-2018).
Yesterday, the board approved two cement building-materials investment projects worth Bt2.15 billion, as well as the issuance of no more than Bt20 billion worth of debentures.
Of the amount, Bt1.5 billion will be invested in MG Stone-Slabs. Slated for completion in mid-2015, the plant for stone-slabs manufacturing will be located in Saraburi, with capacity of 400,000 square metres of slabs. The remaining Bt650 million is earmarked for the acquisition of all shares of Monier Group, which jointly produces roofing products (concrete and ceramic roof tile) with SCC in Cambodia, Laos, the Philippines, Thailand and Vietnam. This will allow SCC to take full control of all operations in Asean. All the transactions are expected to be completed in December this year.
The group sees a possibility that 2013 revenue would exceed the target by Bt2 billion-Bt3 billion, reaching Bt437 billion, thanks to higher domestic sales of chemicals and cement, as well as more income from overseas businesses.
The target was set previously at Bt435 billion. In the first half, the company’s revenue hit Bt215 billion, up 6 per cent on year. Its net profit went up by 83 per cent on year to Bt18.7 billion.
“Though the revenue may exceed target, we won’t revise the target upward as it is just a marginal increase,” Kan said. “In the latter half, the baht tends to strengthen against the US dollar in line with the growing tourism industry, which may lower [baht-denominated] revenue to Bt440 billion.”
SGC’s annualised foreign income is about $1.2 billion, and 75 per cent is hedged against exchange risks.
Asean businesses in the first half generated Bt17.7 billion of revenue, or 8 per cent of the total. This represented a 22-per-cent increase on year.
Source: The Nation