Speculation that Thai company will co-invest with Lao-Phatthana Cement Industry

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Laos: A leading Thai cement company, widely speculated to be Siam Cement Group (SCG), will co-invest with Lao-Phatthana Cement Industry Co, a unit of Souksomboon Group, in the construction of a US$330m cement plant in Khammouane, Laos.

Chaovalit Ekabut, SCG's chief financial officer and vice-president for finance and investment, declined to comment on whether the Thai cement producer is SCG, but said the group continued to explore opportunities in the Asean countries.

Chittakorn Souksomboon, president of Souksomboon Group, said that the Khammouane plant will have a clinker capacity of 1.6Mt/yr. The clinker will become 2.2Mt/yr of OPC and blended cement, with half serving the Laotian market and the rest exported to Thailand. The plant is due to be completed at the end of 2015 or early 2016.

"The possible Thai partner with 100 years of history is interested in jointly investing with us because we have a 50-year concession from the Laotian government to operate a limestone mine on 3875m2 nearby," said Souksomboon. The Souksomboon Group is keen to forge a partnership with a Thai cement firm because it wants to sell construction materials through a Thai hardware chain in the future.

Cement demand in Laos is forecast at 3.5Mt/yr, but supply is just 1.7Mt/yr. The landlocked country must import cement from China and Thailand. The Laotian economy is growing robustly with infrastructure projects such as roads, double-track rail and dams being developed ahead of the Asean single market comes into being in late 2015.

Souksomboon Group already runs a cement plant in Vientiane, Laos and is building a plant in Nakhon Phanom, Thailand, which is due to be completed in 2014.

Last modified on 20 November 2013

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