INTERVIEW-Siam Cement plans to raise sales target, boost capacity
* Plans to boost domestic cement capacity by 10 pct
* To build new $400 mln cement plant in Myanmar
* Sees strong ASEAN demand for core businesses
(Adds quotes on growth, petrochemicals)
BANGKOK, July 10 (Reuters) - Siam Cement Pcl, Thailand's largest industrial conglomerate, plans to raise its 2013 sales growth target and boost cement capacity at home and in Southeast Asia in response to strong demand in the region.
As the Thai economy slows and export growth declines, Siam Cement will focus on high-growth neighbouring countries with strong demand for building materials, petrochemicals and papers, the company's Chief Executive Kan Trakulhoon said on Wednesday.
"Cement demand in ASEAN is expected to rise about 1.5 times of GDP, while demand for petrochemicals should rise an average 4-5 percent, in line with economic growth," Kan told Reuters in an interview.
The company, which competes with rivals like units of Holcim and PT Semen Indonesia Tbk, plans to raise domestic cement production by 10 percent in the next few years, Kan said adding new cement plants were due to start up in Indonesia and Cambodia in 2015.
"The higher target is to reflect higher revenue from our building material business after a recent restructuring in its sanitary ware business and an acquisition of Prime Group, a ceramic tile maker in Vietnam," Kan said.
The region's second-largest cement maker produces 23 million tonnes annually at home, of which 5 million tonnes is exported. The company wants to increase overall sales growth this year by 7 percent to 435 billion baht ($14 billion).
Siam Cement shares rose after Kan's remarks, extending earlier gains to close up 2.3 percent at 438 baht. The overall market was down by 0.7 percent.
Strong domestic demand, driven by public investment and the residential sector in the provinces, has prompted the company to cut cement exports. To meet demand in neighbouring markets, it will build more plants there, Kan said.
Kan said Siam Cement had received a licence to build a cement plant and small power plant in Myanmar at an estimated cost of more than $400 million. The company started business operations in Myanmar in 1996.
The plant, to be located in Mawlamyine, southeast of Yangon, will have annual capacity of 1.8 million tonnes and is expected to start production in 2016.
The Siam Cement boss said demand for cement elsewhere in Southeast Asia was expected to outpace demand at home, with outstanding growth prospects in Indonesia, Myanmar, Vietnam and Cambodia.
Siam Cement, 30 percent owned by the Thai royal family's investment arm, the Crown Property Bureau, has invested 92 billion baht ($2.9 billion) since 2001, mostly on acquisitions.
Sales from Southeast Asia operations accounted for about 8 percent of total sales. Indonesia is the biggest contributor to sales revenue from the region.
The company's petrochemical business is showing signs of picking up after experiencing a downturn since the second half of 2011, thanks to improved margins which have boosted first-half earnings, Kan added.
Profits from its petrochemicals business contribute just 14 percent of overall profit compared to 50 percent in 2011.
After a seven-year delay, Siam Cement plans to come up with broad terms for its investment in a $4.5 billion petrochemical complex in Vietnam within a few months and will conclude financing details next year, Kan added.
Siam Cement shares have risen 35 percent in the last 12 months, outperforming a 18 percent gain by the broad market.
($1 = 31.3050 Thai baht)
(Reporting by Khettiya Jittapong; Editing by Jeremy Laurence)