Thai cement giant starts work on Mon State plant

Thailand’s largest cement producer has begun work on its first factory in Myanmar, aiming to open doors on the facility as soon as the second quarter 2016.

Siam Cement Group has been exporting to Myanmar for over two decades, but the August 2013 announcement to build a plant in Mawlamyine, Mon State marks the first time it has planned a factory in the country.

The Myanmar market is becoming increasingly lucrative for cement producers. Growing urbanisation is increasing demand for construction materials for residential development especially in three key cities – Yangon, Mandalay, and Nay Pyi Taw, said Chana Poomee, Myanmar country director for SCG Cement-Building Materials.

“The growth of Myanmar’s GDP and GDP per capita after the country opened up for foreign investments in recent years have resulted in the increase in consumer demand and foreign investments. This has also contributed to increased sales opportunities for SCG and its expansion in the market,” he said.

Mr Poomee said SCG sees strong potential in the Myanmar market especially with the upcoming establishment of the ASEAN Economic Community, which is set to lower trade barriers and ease customs procedures between most ASEAN countries at the end of 2015.

SCG’s sales in the country will reach 2 million tonnes by this year, Mr Poomee said. Currently, the company’s two main subsidiaries in Myanmar are Myanmar CPAC Service and Mawlamyine Cement.

SCG intends to open the Mon State plant, its first in Myanmar, in the second quarter of 2016. It has finished work on an access road and is building a 40 megawatt plant to power the factory. The site for the factory is also being prepared for work, and SCG has signed on a contractor to build the facility, which will eventually be able to produce 1.8 million tonnes of cement a year.

Beyond the Mon State project, SCG is looking for future opportunities to invest in Myanmar, both in greenfield projects or through acquisitions, though “it depends on market demand and customer needs,” said Mr Poomee.

The firm is eyeing other regional expansion opportunities in other ASEAN markets like Indonesia, Vietnam and Cambodia.

The Bangkok-based conglomerate is one of Thailand’s largest companies. The business first started in 1913 when Thai King Rama VI commissioned SCG by royal decree to make cement. Today, the company – whose revenues came in at more than 434 billion baht (US$13 billion) last year – has focused on three areas, SCG Paper, SCG Chemicals and SCG Cement-Building Materials.

“For the market share of cement, ready-mixed concrete, and fibre cement board, SCG is the market leader [in Myanmar] and sees more potential on the growth of structural products as a result of increasing infrastructure development projects in Myanmar,” Mr Poomee said.

SCG also announced it would donate funds – about $62,600 to start – and materials including cement and ceramic to complete the exterior of the biggest reclining Buddha image in the world at Win Sein Taw Ya Monastery in Myaing Kone village near Mawlamyine, according to the company. Other initiatives, including the building of a school in the area, could come next.

Local monks in Myaing Kone village said they’re looking forward to giving the famous statue a facelift.

“All the monks and I are excessively happy because of SCG’s help for the Buddha image,” said monk Oo Zin Khay Mar.

And though Mr Poomee said he could not yet confirm figures regarding potential hires at the cement plant, he affirmed in an earlier conversation SCG could employ a few thousand people directly and indirectly. The firm aims for more than 90 percent of its plant’s employees to be locals, according to the company.

SCG president and CEO Kan Trakulkoon said it is important to invest in an environmentally responsible way.

“SCG will implement the environment conservation and social enterprise programs in Myanmar like other ASEAN countries”, he said at a Bangkok symposium on ASEAN Sustainable Development held on November 14.


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