Written by Madelaine B. Miraflor Reporter Published on 13 March 2013
Siam Cement Group (SCG), a giant Thai conglomerate, is looking at the Philippines as a prospective major contributor in its business, but the high cost of electricity rates somewhat hinder its plans to spread out its operations and put up more plants in the country.
A company official also said that as a whole, the company may spend lesser this year after it spent around $200 million in the previous years for new product innovations and facility upgrades.
Jakkrit Suwansilp, vice president for sales and marketing for Mariwasa Siam Ceramics, said that the company imports its products from Thailand and Indonesia, and as much as the firm wants to expand and import from the Philippines, it just can’t because electricity prices are quite high.
He also said that the company intends to build more facilities if ever power rates will go down. The company recently built a P450 million-biomass plant in the country that can generate up to 45 megawatts of electricity.
Suwansilp further mentioned that in the previous year, the company spent $100 million for facility upgrades in its Mariwasa plant, and another $100 million for new products that it recently launched.
As for the company’s capital expenditure (capex), Suwansilp specified that the firm intends to spend lesser.
“The capex will be less than last year because a couple of years ago, we had the biomass project. It’s a big project and now we’re done with that, but of course, we keep on investing—like upgrade our facilities to be up-to-date,” he said.
In April last year, SCG firmed up its consolidation with ceramic tile manufacturer Mariwasa-Siam Ceramics Inc. (MSC), increasing its stake in MSC from 46 percent to 83 percent. MSC is one of the pioneers in the Philippine ceramic tile industry.
Growth from PH business
According to Suwansilp, SCG is eyeing further growth for its business in the Philippines, as the country contributed more than P1 billion out of the P6 billion worth of sales revenue the company generated in 2012.
“In the fourth quarter of 2012, SCG Philippines recorded revenue from sales of $37 million, an increase of 69 percent year-on-year,” he said.
Suwansilp also said that the firm expects its business in the Philippines to continue to grow by 18 percent this year.
“We love to have Philippines to be one of the major contributors to the growth because Philippines has an edge when it comes to population,” he said.
Suwansilp added that SCG experienced remarkable growth in the Philippines in 2012 from the increasing domestic demand for cement and building materials, as well as from the positive performance of its joint venture businesses in the Philippines.
MSC contributed 82 percent of SCG’s sales, with SCG’s total revenues amounting to $142 million and reflecting a 50-percent growth for the year.
As of December 2012, SCG’s total assets in the Philippines amounted to approximately $225 million, which comprises at least 13 percent of SCG’s total assets in Southeast Asia. source
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