Cement demand in Thailand is expected to increase by at least five per cent next year stimulated by an acceleration of government infrastructure development, according to the chief of the country’s leading cement producer.

Kan Trakulhoon, CEO of Siam Cement Group (SCG), believes that the Thai economy has bottomed out since August and is recovering gradually. He said the company expects cement demand to recover significantly from the second half of next year, thank chiefly to government projects.  "We expect cement demand, which is a leading indicator of the economy, to grow by a minimum of five per cent next year. This is our conservative estimate," he told' The Nation'.

Last year, demand increased 12.2 per cent YoY to reach a record levels of 30.08Mt, up 12.2 per cent from 26.8Mt the year before, according to the Thai Cement Manufacturers Associations (TCMA). For 2014, the TCMA expects consumption to remain flat.

Earlier this week, SGC reported a 20 per cent drop in net profit for the third quarter yesterday,  caused mainly by non-recurring gains booked in the same period last year. Despite the double-digit decline, the result beat analysts forecasts and KGI Securities (Thailand) expect improvements from the fourth quarter. "In 3Q14, we saw a slow performance from the paper and cement & building material units due to a maintenance shutdown in paper machines and a three per cent drop in cement demand during the low season," KGI said. But the research house added that "hefty local demand" for the packaging chain will likely help Siam Cement show solid earnings growth in the next quarter.