Industrial conglomerate Siam Cement Group is planning a joint venture with Siam Global House Plc, a building materials and home improvement retailer, says an SCG source.
The source said the move was aimed at opening the first chain of Thai construction materials stores in Myanmar and gaining from the growing construction industry in the region. The company expects to open two retail stores in Yangon and another in Mandalay.
“We’re also looking at Cambodia, Laos and Vietnam but starting with Myanmar, as we see strong demand for building materials and warehouses there,” the source said.
“Myanmar is spending a lot on infrastructure and investment projects.”
SCG Distribution Plc, wholly owned by SCG, plans to expand its building materials retailing business in Cambodia, Laos, Myanmar and Vietnam as Asean members invest more on infrastructure projects to facilitate trade ahead of the Asean Economic Community.
SCG Distribution and Siam Global House will form a new company called Global House International, a 50:50 joint venture that plans to raise total capital of 400 million baht for projects in those four countries. Siam Global House is 30.02% owned by SCG Distribution.
With several business lines in Asean, ranging from paper, petrochemicals, cement and building materials, SCG expects Asean revenue will account for 21% of last year’s target of 488 billion baht.
Between January and September, SCG revenue stood at 381 billion baht.
Witoon Suriyawanakul, chief executive of Siam Global House, said his company planned gradually to open more retail shops in Cambodia, Laos and Vietnam.
“We have not decided yet our next market after Myanmar, as we have feasibility studies ongoing, but expect to finalise a decision in the first half of 2015,” said Mr Witoon.
He said the retail stores would be stand-alone shops under the Global House brand.
This year Siam Global House plans to open 17 new retail building materials stores in Thailand and build a 300-million-baht distribution centre on 100 rai to serve strong domestic demand, Mr Witoon said.
“We don’t plan to review our investment this year, as the agenda was set appropriately as part of a long-term plan, so there are no concerns that would force a rethink,” he said.
Siam Cement shares (SCC) closed yesterday on the Stock Exchange of Thailand at 456 baht, up two baht, in trade worth 272 million baht.
Source: Bangkok Post