Thailand: Italcementi to keep ASEAN base

Thailand will continue to be Italcementi Group's production base in ASEAN and its base for expanding into Myanmar after HeidelbergCement acquires Italmobiliare's 45 per cent stake in Italcementi in July, group Chief Executive Officer, Carlo Pesenti, said in an interview with The Nation.

"Since Italmobiliare and HeidelbergCement signed an agreement regarding the sale to HeidelbergCement of Italmobiliare's 45 per cent stake held in Italcementi in July last year, we have discussed the policy for our subsidiaries in Asia, including Thailand," he said.

Italcementi Group holds a 49 per cent stake in Thailand's Asia Cement. The group also has business in Bulgaria, Morocco, Kazakhstan, Egypt and India, as well as operating in North America. Asia Cement and its subsidiary Jalaprathan Cement have production capacity of 5Mta of cement.

"Thailand is our production hub and business arm for expanding in ASEAN," Mr Pesenti said.

"HeidelbergCement, which will be the major shareholder of Italcementi when the deal is complete this July, has a policy to maintain the business in Thailand and its business plan to expand [into] Myanmar, because HeidelbergCement did not have [a presence] in Thailand."

This will be an opportunity for HeidelbergCement to expand its business in Asean after the deal is complete, Mr Pesenti added. Italcementi says the rationale of this merger is supported by a perfect geographical fit with HeidelbergCement's existing footprint , with limited overlap of plants in Belgium and the United States, and the significant potential for synergies and the combination of strong innovation and research-and-development capabilities of both companies.

The combined group will have a production capacity of about 200Mta of cement, 275Mta of aggregates and 49Mm³ of ready-mix concrete. Pro-forma 2014 revenues were about EUR16.8bn, generated in more than 60 countries worldwide.

Nopadol Ramyarupa, managing director of Asia Cement, told The Nation the company had set aside an investment budget of THB300m-500m (US$8.55-14.25m) for maintenance of its three production plants here, in Saraburi, Phetchaburi and Nakhon Sawan, this year.

The company is also looking into regional expansion, including into Cambodia, he said. However, it has to wait for the deal between HeidelbergCement and Italcementi to be completed in July before making a decision on expansion abroad.