SGC second-quarter declines on weaker demand

Siam Cement Group (SCG) reported a 14 per cent decline in second-quarter net profit due in part to weaker domestic cement demand as months of political unrest have delayed spending on infrastructure projects.

Profit for the three months to the end of June fell to THB8.53bn, which was also impacted by lower chemical earnings.

SCG chief executive, Kan Trakulhoon, said Thai cement demand is expected to increase by zero to one per cent due to a drop in construction activity and a lack of new infrastructure projects. Consumption is expected to decline by about 2-3 per cent during the third quarter, followed by a flat performance in the final three months of the year, according to Trakulhoon’s estimates.

The company is now stepping up expansion in the ASEAN region by revising its current THB250bn (US$7.8bn), five-year investment plan that kicked off in 2013. The plan is being revised for approval at a board meeting in August. Cement plants in Cambodia, Indonesia, Laos and Myanmar are already in the pipeline, and other building material plants are planned to reduce shipping costs through increased local production.