Thai industry waits for more on rebuilding plans

Thailand: The Thai cement industry is still waiting to see more details of the government's programme for infrastructure projects following the recent devastating floods. It is anxious to determine whether growth will exceed the normal annual rate of 3-5%. The government so far has not laid out clear plans on repairing the flood damage to roads and other infrastructure installations or for how it intends to bolster the Kingdom's disaster-protection system with floodways and/or drainage tunnels.

Kan Trakulhoon, president and chief executive officer of Siam Cement Group, said that demand for the cement in 2012 was now anticipated to grow by 5%. This rate is expected to continue for several years thanks to the demand for repairs to roads, houses and other buildings, as well as improving the flood-protection system and constructing new homes. However, it has to wait for an outline of new infrastructure projects from the government before making a clear forecast of cement demand in 2012 and the medium-term.

Trakulhoon said that sales of building materials had bright growth prospects after the flood water recedes. "Because of the floods, the demand for high-rise condominiums in central Bangkok will be higher. I have always believed that the number of high-rise residences such as condominiums has not reached saturation. I have an optimistic view that demand for cement will keep growing."

Trakulhoon also pointed to the overall improved sales of building materials and cement in October 2011 as evidence for his optimism. In that month, sales of cement in the centre of Thailand dropped by 40% but sales in the north, south and northeast were good, indicating a strong background of cement growth.

Chantana Sukhumanont, executive vice president of Siam City Cement, the country's second-largest cement producer, pointed out that restoration itself does not require particularly large amounts of cement. She said that cement consumption in 2012 would not grow significantly from building restoration, highlighting a greater need for fittings and finishings such as plumbing fixtures and electrical wiring.