SIAM MORTAR TO SPEND UP TO BT700M ON CAPACITY BOOST

       Siam Mortar, a construction-materials unit of Siam Cement Group, is planning to invest Bt600 million to Bt700 million to boost its annual production capacity of ready-to-use mortar by 500,000 tonnes by 2011.
       The expansion is expected to serve its future growth of 20-25 per cent per year, despite shrinking demand in the overall cement market.
       Managing director Rewat Suriyapananont said Siam Mortar currently operated at 80 per cent of production capacity of 1.3 million tonnes per year. It has three production plants, of which two are
       located in Saraburi and the other in Nakhon Si Thammarat.
       "We need to expand our production capacity and conduct aggressive marketing strategies if we plan to double our sales in five years," he said.
       The new plant could be located in the central region, where demand is high, he added.
       Although overall cement consumption is expected to fall by 5 per cent this year, Rewat is confident his firm's mortar sales will maintain growth of 10-15 per cent to 1 million tonnes thanks to high-quality products and innovative solutions for customers.
       "Even though our sales growth is increasing, the growth in 2009 will still be lower than the [average] 20-25 per cent over the past five to six years, as a result of the economic slowdown. However, we believe that our sales growth will rise to 20 per cent next year, since property developers have returned to proceeding with their incomplete projects in big cities like Phuket," he said.
       About 80 per cent of Siam Mortar's sales are from big property projects, with the remainder generated by private houses and the house-renovation market.
       "Since the economic crisis erupted, we realised we should focus more on the private housing market. Despite a small volume of cement demand, it has more sustainable growth than large property projects," he said.
       Hence, the company plans to change the sales proportion to generate 40 per cent of sales from property projects and 60 per cent from private housing and the renovation market.
       He said the future trend of the cement market would be to develop eco-friendly products that would be good for both the environment and inhabitants' health.
       "SCG Cement has allocated a budget of Bt200 million for research and development each year, because we will change ourselves from a cement-maker to a solution provider. For example, we will not only sell cement but also wall and floor systems in the future, in order to better utilise customers' budget and time," he added.
       Presently, the total market for mortar cement is worth about Bt2 billion, with a volume of 2 million tonnes per year. It is predicted to expand by 10 per cent this year.
       Siam Mortar has a 50-per-cent share of the market, followed by TPI Polene with 40 per cent and Siam City Cement with 10 per cent.