SCC Asean expansion on track
In an update on its strategy for its cement & building materials unit, reported on by SCB Securities in The Nation (Thailand), SCC said the investment programme is expected to not only provide SCC with high demand growth and a good margins but also offer a borderless network, lower logistics costs and enhanced operational flexibility, according to the company.??SCC targets EBITDA margin from its new Asean plants to be close to local cement margins in Thailand. With a fragmented cement market in Vietnam (market leaders account for 34 per cent of market share), the company is looking for an investment opportunity via M&A. Thailand´s cement supply will increase by 4 mt to 60 mt following the completion of TPI Polene´s new line later this year. SCC does not expect a severe impact on the industry from the addition since the entire industry is running at its highest ever utilisation rate of 85-90 per cent. Moreover, the amount is very small against the local sales of 40Mtand exports of 10Mt this year, it notes. SCC expects local cement demand growth to be flat this year but forecasts a demand growth of 5 per cent per annum to 55 mt in 2020.