Cpac may open factories in Vietnam and Cambodia

BUSRIN TREERAPONGPICHIT

The Siam Cpac Block Co, the Siam Cement Group's building materials producer, is considering new factories in neighbouring countries, according to sales and marketing manager Pittaya Jantawichayasuit.

He said a feasibility study aimed to explore opportunities to develop concrete block factories to serve local markets and also supply SCG, Thailand's largest industrial conglomerate.
Models show off some of the more stylish applications of Cpac products at a company marketing event yesterday.

Potential markets are Vietnam and Cambodia, as well as the Middle East, with a likely this year, he said yesterday.

He said the capacity of a new factory must be at least 100,000 square metres, with a minimum investment of 200 million baht.

''Actually, we could go into the overseas market by exporting, but cement product margins are very narrow because they are bulky goods, which results in very high transport cost,'' he said.
Other Siam Cement affiliates have used a similar strategy, opening roof-tile and cement plants outside of Thailand in order to expand production overall and also serve those markets at a cost lower than that of exporting from Thailand.

''The countries where we have cement plants will be our priority in order to secure raw materials,'' Mr Pittaya said.

Siam Cpac Block is currently running at 75-80% of its annual capacity of 3.2 million square metres at its plant in Saraburi province.

For the domestic market, the company has set a 12% target for sales growth this year, well above the 4-5% estimate for the overall concrete-block market.

The company last year earned revenue of 870 million baht came from sales to the construction industry and directly to homeowners.

Mr Pittaya expects homeowners to account for more revenue this year, as construction-industry demand for concrete blocks for public projects becomes saturated in Bangkok. Potential remains in other centres such as Chiang Mai, Phuket and Khon Kaen, however.

The company has set aside a 20-million-baht marketing budget to educate homeowners about concrete as an option for home decoration in a bid to widen its user base.

The budget will go mainly to building an image via exhibitions and marketing events, similar to the strategy adopted by its sister brand, Cotto, which has successfully positioned its ceramic tiles as fashion and lifestyle products.