Login

Thailand cement market – growth and sustainability: Nithi Patarachoke, Vice President: SCG Cement – Building Materials (Thailand)

Filmed at Cemtech Asia 2015, 21-24 June, Grand Hyatt, Bangkok, Thailand

Already a subscriber? Login

Subscribe to get access to all News, Articles and Video sections of the CemNet.com website.

Subscribe

Ladies and Gentlemen, good morning, Sawasdee khrap. I'm very honored to be here with you today. Today, I'm going to talk about three topics. First is Thailand demand and supply situation, second, Thailand construction sector and driving fast, and the third one, growth and sustainability for Thai cement market. I will also use SCG as an example in the third topic.

Now, I would like to start the first one. This is the situation for demand-supply. Now, there are eight manufacturers in Thailand. Total capacity about 56 million tons per year. By the end of this year, TPI Polene plans to commercialize about 4 million tons per year capacity. This is the supply between, this is the first four luckiest manufacturer, SCG, Siam City Cement, TPI Polene, and Asia Cement and JCC, the same owner, and this second half, we will have another 4 million tons. Actually, the demand per situation since 1997, the crisis here, Tong Yang Group crisis here in Thailand, Thai cement market has been pressured by over supply situation until now. We still have the over supply situation, but getting a little bit better. This is the driving fast factors cement industry in Thailand.

We have three sectors; residential, infrastructural, and commercial. Last year for residential, it's 53% of the total cement consumption, infrastructural about 30%, and commercial is about 17%, but this year, this is our forecast, this year the growth will be only a few percentage to 4% for this year, and residential will be only 50%, infrastructural 34%, and commercial 60%.

In Thailand, the demand will be merely in metro area, East and North-East, this account for about 60% of the total Thailand market. As you know, the first half of this year, Thailand economy decline from lower household income, lower investment sentiment, so only the good growth sector is only infrastructure from the government project. This is what the residential household income, the red letters like a minus factor, the green letters are plus factor. For the residential, household income dropped, but we have MRT 10-line in plan, some already under construction, urbanization. For the private and non-residential, we've to slowdown new project. Now the private sector, they don't have much on the new projects. Decline on export, but they've confidence from the infrastructural projects.

For the infrastructure in total, now we've local infrastructure project like small road in the up countries, and in long term, in the next seven to eight years we'll have Mega Projects which already start and we'll start more at the end of this year. This is the detail of the mega projects. For mega project construction, additional demand that we forecast from the project will come from road, train, MRT, and also including high speed train, or medium speed. The total will be 10-12 million tons.

Infrastructural project consumption, this is the percentage, that mainly will come from high speed train and road, but some private institutes have forecast that the cement consumption will be induced by this infrastructural project from the private sector and from the residential sector three times of these 10-12 million tons, but gradually come after the infrastructural project finish. It means, if we finish one MRT line there will be house, condominiums, and commercials will be building after that.

This is the detail of the budget of the infrastructural budget, mega budget. Thai government expect to have forecast on the mega project by this year about 1.75 trillion Baht. Come from Motorway about 150 billion Baht, from railway transport about 1.1 trillion, and and from MRT about 280 billion Baht, and also some from others.

So, within this year, they will approve this 1.75 trillion Baht more on the existing project. Okay, for the outlook, we see that in short term we still have over supply situation by some capacity increase, and also still big gap between capacity and demand, but in long term, we see the good opportunities,

good growth opportunities, good prospect for the cement consumption. They'll be coming from mega project. Private investment that'll follow the mega project. AEC and related investment will come 5-10 years later and urbanization of the big city in Thailand. But, there are still outside risk from the world economic recessions and also labor shortage in Thailand.

This is the situation in the pastthree, four years, we have labor shortage, especially in construction labor, and if we have a lot of mega project, then there'll be the same situation, there's labor shortage again. Okay, this is the third topics already for me. As the world give important to environment more and more, so Thai cement industry also share the same view. Allow me to use SCG as a example of how Thai Cement Industry developed or moved toward the green and sustainability trend. We have eight example that I will mention later about our practice in green and sustainability trend. This is like a Semi-open cut, Alternative fuel, Environmental friendly operation, Cement partnership, not only SCG, we have partnership with Thai Cement Manufacturers Association, with other friends in the industry to do about community engagement and environmental for the community also. You have how we do about Biodiversity and we have Green Products, also we join World Business Council for Sustainable Development for Cement Sustainability Institute also.

I would like to go one by one. This is SCG, Lampang in the North of Thailand. We have Quarry, this is a cross section model, we call Semi-Open Cut Mining. The noise from the industry and that's where we protect by this kind of quarry. This is the boundary line, open-pit mining, and future mining pattern. This is the view from outside. So the sky will make the environmental impact very minimum. For the biodiversity, we believe that industry and nature can work together to create a green environment.

We have Wildlife Diversity Monitor, continuously monitor. We have Local Plant Rehabilitation, also immediately after we do the quarry on mining, we don't wait until we finish, we do it continuously for rehabilitation. For the alternative fuel usage, we invest about 250 million Baht for the Gasifire to use the low lignite, low quality lignite in the calciner, and we also invest in 5.8 billion Baht for waste heat recovery. Also, we have this kind of Municipal Solid Waste.

We burn it, RDF, a lot of volume to make it less waste for the community. For community engagement, the big project for us, we did many projects, but the big one for us is the build Check Dam for the community. Last year, we build about 52,000 dams during eight year. I think this year it's about 65,000 dams already.

This is to prevent water shortage, flood, and polluted water. We also not like doing by our own, we engage the community to a self sustained community and build sense of ownership to the community also. We do it together with the community, with our employees all over Thailand. For the environmental friendly operation, we invest a few million Baht, no, no, a few 100 million Baht.

For the Close-Loop Operation for sustainable coal import at Bondai Temple, Ayutthaya. This is starting from the fully closed system from port-warehouse-dispatching building, also in the belt conveyor in the building in the unloading process, and also Stacker-Reclaimer, with close-loop operation. This one you have very, or no impact for the people in Ayutthaya, for our coal import and cement exporter also. We have SCG Eco products.

These product is one of these products, we have about 25% of total SCG product, is the eco product, not only cement, I mean, include chemical, packaging, paper, everything, but this is the example for the cement. We have cement hybrid, Elephant Hybrid Cement which is actually, it's Akkaya[Sp?] Portland Composite Cement and we're the first in Thailand to achieve TIS standard for the new, this new product. We use environmental friendly raw materials and productions process for this one. And this is like a research that we have done for more than 10 years about environmental. We have been awarded by Dow Jones Industry, Dow Jones Sustainability Index. As the industry leader, it's like a sector leader in construction materials for four consecutive years,

starting from 2011 to 2014. Actually, we got "Gold Class" since 2008, seven years in a row, and we have entered to be the member of DJSI since 2004. This is our effort that we have done as an example in Thailand, that we, in cement industry, we move toward the green and sustainability trend, and also, not only in Thailand, we already expand to our ASEAN countries, our friend in ASEAN member.

We have second line in Cambodia, okay, sorry second line in Cambodia this year, and we'll be Indonesia the end of this year. Laos and Myanmar, and we strongly believe that ASEAN will potentially drive the world economy, we will become one factor, and SCG also, we believe that we will grow with ASEAN, and all the sustainability practice that we have done in Thailand, we'll also do the same in our expansion in ASEAN.

That's all my presentation today. Thank you very much for your quite attention.

Cemtech Europe 2024

Cemtech ASIA 2024

Cemtech MEA 2024

Cemtech Europe 2023

Cemtech Asia 2023

Cemtech MEA 2023

Cemtech Webinar 2022

Cemtech MEA 2022

Cemtech Americas 2021

Cemtech Asia 2021

Cemtech Webinar 2021

Cemtech Webinar 2020

Cemtech MEA 2021

Cemtech Virtual 2020

Cemtech Europe 2019

Cemtech Asia 2019

Cemtech MEA 2019

Cemtech Europe 2018

Cemtech Asia 2018

Cemtech MEA 2018

Cemtech Europe 2017

Cemtech Asia 2017

Cemtech MEA 2017

Cemtech Europe 2016

Cemtech Asia 2016

Cemtech MEA 2016

Cemtech Americas 2015

Cemtech Europe 2015

Cemtech Asia 2015

Cemtech MEA 2015

Cemtech Europe 2014

Cemtech MEA 2014

Cemtech Europe 2013

Cemtech Asia 2013

Cemtech Jakarta 2012

Cemtech MEA 2013

Cemtech Geneva 2012

Cemtech MEA 2012

Cemtech Europe 2011

Cemtech Europe 2010

Cemtech Middle East 2010

Cemtech Europe 2009

Cemtech Dubai 2009

Cemtech Florida 2008

Cemtech London 2008

Cemtech Singapore 2008

Cemtech Dubai 2008

Cemtech Florida 2007

Cemtech Prague 2007

Cemtech Abu Dhabi 2007

cemtech florida 2006

Cemtech Rome 2006

Cemtech Barcelona 2005