News Post

Siam Cement Group Proceeds with Vietnam Petchem Complex

Siam Cement Group (SCG) has approved a medium-term investment plan worth 250 billion baht including a long-delayed US$4.5-billion petrochemical complex in Vietnam, the Bangkok Post reports.

Kan Trakulhoon, the president and chief executive of Thailand's top industrial conglomerate, said the board last weekend endorsed the expenditure for 2014-18, with half of it to be spent in Thailand and the rest mainly elsewhere in Asean.

The figure, which is 25% higher than the 200 billion baht in the previous 2013-17 plan, omits an amount to be spent on acquisitions pending negotiations, he said while declining to reveal the maximum amount agreed by the board for such deals.

Wholly owned SCG Chemicals together with Thai Plastic and Chemicals Plc, SCG's SET-listed petrochemical subsidiary, owns 46% of the Vietnamese project and Qatari and Vietnamese partners the rest.

The group recently bought a 400-hectare plot on southern Vietnam's Long Son island on which to build that country's first petrochemical complex.

It will produce 1.4 million tonnes of olefins together with downstream products including polyethylene, polypropylene and vinyl chloride monomers.

"We have already signed a contract with the local government and are now awaiting the financial close of the project, hopefully by the end of 2014," said Mr Kan, adding that construction would be completed in 2018.

With not many new petrochemical projects on the horizon, now is the right time for such a project to proceed, as project costs will likely decrease, he said on the sidelines of the Thailand Corporate Excellence Awards hosted by the Thailand Management Association.

Vietnam has experienced relatively stable economic growth in recent years, with gross domestic product (GDP) growth of 5.6% last year, 5.9% in 2011 and 6.8% in 2010.

This year, the World Bank forecasts Vietnam's GDP will expand by 5.13%.

SCG, with its vision of becoming a sustainable Asean business leader by 2015, has expanded aggressively in the region.

A greenfield cement factory was built in Indonesia, while the second phase of its cement plant in Koh Kong, Cambodia was begun.

Since 2007, the group has spent 60 billion baht on 22 acquisition deals.

Other major projects approved recently by the board include a 1.8-million-tonne cement plant in Myanmar worth 12.4 billion baht.

That facility and a 40-megawatt power plant are expected start up by mid-2016.

Regarding sustainability, Mr Kan said SCG has spent 17 billion baht over the past five years to lower energy costs and address climate change issues, and this investment has already yielded a savings of 5.7 billion baht annually.

By converting waste heat to electricity at its cement factories and making other alternative fuels from biomass and other industrial waste, the group has reduced incineration by 230,000 tonnes and cut carbon dioxide emissions by 960,000 tonnes a year.

Last year, 37% of total electricity used was generated and used within SCG.

Shares of Siam Cement (SCC) closed on August 29 on the SET at 392 baht, up six baht, in trade worth 569 million baht.

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Siam Cement Group Proceeds with Vietnam Petchem Complex

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