June 20, 2008

SCG Lifts Trading Activity Abroad

By Nareerat Wiriyapong, Bangkok Post, Thailand

Jun. 19--Siam Cement Group (SCG), Thailand's biggest industrial conglomerate, is aggressively expanding its trading business overseas to tap into growing opportunity in new markets, mainly in Eastern Europe and Africa.

Wholly owned subsidiaries would be opened on four continents toward the end of this year, said Kalin Sarasin, managing director of Siam Cement Trading Co Ltd (SCT), which handles import-export and offshore trading for SCG as well as customers outside the group.

One would be in Poland to expand the recycling business into Eastern Europe, while Tanzania will be a centre for the African market. The third one would be located in Houston to focus on the plastic resin business in the US with another unit in Beijing to support its existing operations in China.

Poland is seen as having the best potential as a gateway to Eastern European markets such as Romania and the Czech Republic.

"We are also targeting Poland as the stepping stone to western Europe as it is within driving distance of Germany," Mr Kalin said.

In Houston, Mr Kalin said the shrinking US economy would give SCG a greater opportunity to source plastic chemicals from there.

The new four subsidiaries would add to the total of 30 offices being operated in 19 countries across Asia, the Middle East and Indochina. By the end of the year, SCT would have 34 offices in 21 countries in total.

Also, the trading arm of SCG will open two more recycling centres for industrial materials in Vietnam worth six million baht each. "So far, eight factories are in operation in the Asean region such as the Philippines, Cambodia and Laos and a new potential one in Singapore is the subject of talks," said Mr Kalin.

Currently, SCT's business covers 40,000 items in four categories, including energy, recycling of steel, paper and plastics, building materials and industrial products, with expected turnover of 70 billion baht this year, up from 61 billion in 2007.

Of the total turnover, 56 percent is derived from exports, 34 percent from imports and 10 percent from offshore business. Sales of SCG and non-SCG products are 35 percent and 65 percent, respectively, with 15 percent growth forecast this year to 40 billion baht.

Turnover jumped 60 percent year-on-year in the first five months to 30.7 billion baht, thanks to higher demand for coal from industries suffering from high oil prices. The coal business makes up almost 30 percent of SCT's total sales.

The trading firm aims to lift volume of coal to six million tonnes in five years by supplying power plants in emerging markets such as China and India, as well as Malaysia and Indonesia.

SCT is also a major trader of tapioca flour sourced from Thailand and Vietnam. It also plans to start trading other crops such as corn, cassava and fruits to serve rising overseas demand.

SCC shares closed yesterday on the SET at 200 baht, down two baht, in trade worth 475.8 million baht.


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