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SCG chief sees only short-term Impact on economy from floods

Siam Cement Group (SCG), the country’s largest industrial conglomerate, foresees disruption from the severe flooding to affect the Thai economy in the short term, however it expects the recovery to be faster than some analysts have predicted.

“I read some analysis, which said that |the Thai economy will recover in the final |quarter of next year, but I have a strong |belief that it will be faster. At least 80-90 per cent of the affected manufacturing plants are expected to resume operations in the first quarter of next year,” said SCG president |and CEO Kan Trakulhoon.

He said the strong infrastructure, a lot of skilled labour and good investment sentiment in the country were key factors behind foreign investors staying here. He said he had spoken to many foreign investors and found that they were still confident about Thailand because of these factors.

SCG next week will join in the non-deal roadshow in New York as many foreign investors there would like to ask the company for updated information on the country.

“As a private company in Thailand without any agenda, we will speak frankly to those investors, and they are likely to trust our words. It’s time for everyone to help boost the confidence in Thailand,” he said.

Kan was confident of the building-material business next year as people have to spend on repairing their residences, while the government will invest in new infrastructure like roads and flood-protection system. SCG Cement, the market leader, and SCG’s subsidiaries in the building-material businesses are running their plants at full capacity to prepare for the post-flood construction.

Regarding SCG’s business prospects in 2012, he said SCG Chemicals, the company’s largest business unit, remained the key driver although the petrochemical industry is expected to be in the downturn cycle throughout the first half of next year. The low demand in the world market has caused the low spread for petrochemical products as well. The spread for polyethylene at the moment is around US$440 (Bt13,500) per tonne. The number is expected to remain at this level before jumping to $500 in the second half of next year.

“The petrochemical industry reached the bottom in the second half of this year. The first half of 2012 will be better than the second half of this year, and the industry will enter the upturn in the second half of 2012. The great cycle of this industry will be in 2013-2014,” he added.

Sales of cement and building materials will be good in 2012, but SCG so far has not assessed the growth of these businesses.

Source: The Nation

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