Cemex Thailand on the lookout for growth openings

Cemex Thailand on the lookout for growth openings (Thailand) Challenges await Cemex SA, the world’s third-largest cement maker, to build recognition among Thai clients while its production capacity is limited.Nevertheless, the new chief of Cemex Thailand said it was looking to develop a larger presence in the Thai cement market which had resumed healthy growth and showed a promising outlook.”Cemex has been exploring business opportunities in Thailand where the market is very attractive and a growth projection is the best in Southeast Asia right now and in the near future,” said country director Vicente Saiso.The construction and cement businesses in Thailand have received a boost from the improved economy, with the country poised to record the highest growth in Southeast Asia this year and next, he added.Mr Saiso, 37, took the top post at Cemex Thailand two months ago, replacing Jaime Ruiz de Haro who had spent almost three years here before being transferred to head operations in the Philippines. Mr Saiso moved from Indonesia where he worked for three years as vice-president for planning.Cemex, ranked third worldwide after Lafarge of France and Holcim of Switzerland, now controls a 99% stake in a cement plant to the north of Bangkok formerly owned by Italian-Thai Development, a leading Thai construction firm. One year after its acquisition of Saraburi Cement in 2001, Cemex enlarged its capacity by 40% to 800,000 tonnes a year.In July 2002, Saraburi Cement changed its name to Cemex (Thailand) as part of the Mexican cement-maker’s strategy to bolster and diversify its Asian presence. With an annual capacity of 5.8 million tonnes, Cemex is one of the biggest players in the Philippines, and controls a plant in Indonesia, producing 4.4 million tonnes a year.A few years ago, Cemex expressed its intention to acquire a substantial stake of financially troubled TPI Polene, the country’s third-largest producer. The deal was not concluded and TPIPL’s debt restructuring case is still pending, with Holcim seen as the top candidate of the acquisition.The Saraburi plant is now running at full capacity, the level Mr Saiso said was rather limited if Cemex was to grow its presence in Thailand. At present, it has a 3% share in the local market largely dominated by Siam Cement with 40%.Siam City Cement, which is controlled by Holcim, has a market share of 27%, followed by TPIPL (17%) and Italcementi (13%). The Italian cement maker has shares in Jalaprathan Cement and Asia Cement which are in the process of merging their operations.Cemex-labelled cement was introduced in Thailand two years ago in a move the company regarded as ”a big challenge”, Mr Saiso said.”We are building the brand, competing with brands which have presence here for many years. They have big marketing budgets while we can’t afford it.”He said domestic demand would likely to rise more than 4% from last year to 23 million tonnes. The first quarter saw a 11.6% jump on the same period last year to almost 12 million tonnes.Ex-factory prices have also rebounded from last year, when producers were engaged in a price war, but are still lower than the ceilings set by the Commerce Ministry, at 2,194 baht a tonne for bulk Portland cement and 1,958 baht for mixed cement.Listed on the NYSE, Cemex has a global capacity in excess of 80 million tonnes with operations in 30 countries.

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