Siam Cement May Spend 6 Billion Baht on Second Cambodia Factory

By Anuchit Nguyen

May 6 (Bloomberg) -- Siam Cement Pcl, Thailand's biggest producer, may spend as much as 6 billion baht ($189 million) to build a second factory in neighboring Cambodia to triple its production capacity there.

The planned factory, twice as big as the first plant, will increase the Bangkok-based company's capacity in Cambodia to 2.55 million tons a year, company President Kan Trakulhoon said in a May 2 interview. A feasibility study will be completed this year.

Siam Cement, controlled by the king's asset management arm, is building cement and paper plants in countries including Vietnam and the Philippines to counter slowing domestic sales. The company is also expanding investments in petrochemicals to benefit from oil reserves in the region.

``We have to import cement for our customers in Cambodia, as the first factory, which started operations in January, is already running at full capacity,'' Kan said. ``There's a very strong outlook for cement sales in Cambodia because of infrastructure development and economic growth.''

BHP Billiton Ltd., the world's largest miner, and Chevron Corp. are investing in Cambodia to tap the nation's natural reserves of copper and oil. Developers such as Club Mediterranee SA and Starwood Hotels & Resorts Worldwide Inc. are building hotels and adding rooms as more tourists visit ancient temples such as Angkor Wat.

Cambodia's economy expanded 9.6 percent last year and 10.8 percent in 2006, according to the International Monetary Fund's data on its Web site.

Shares of Siam Cement rose 1.9 percent to 212 baht on May 2 in Bangkok. Markets were shut yesterday for a public holiday.

To contact the reporter on this story: Anuchit Nguyen in Bangkok at anguyen@bloomberg.net .