Bangkok--13 Feb--Ogilvy Public Relations Worldwide
In 2006, a year marked with challenges, Siam City Cement Public Company Limited continued to defend its ground with a 6% revenue growth against a 2.1% decline in domestic demand. It recorded a 5% reduction in net income due to a 2.6% drop in Thai domestic sales, although export sales volume went up by 6%. The company was successful in keeping a stronghold of its domestic customers by maintaining approximately 28% market share — unchanged from 2005.
Among the factors that affected the company’s business performance was the slowdown on private investment due to the series of flooding in several provinces, global energy price increases especially during the first quarter to the third quarter of 2006, rising inflation and interest rates, and political unrest. The industry witnessed a change in consumer behavior toward the mid-to-low property segment. The delay in most government projects also caused a setback, as did the strengthening of the Thai baht against the US dollar. However, due to strict margin and cost management, the company has been able to mitigate these negative factors and delivered solid performance.
Siam City Cement export volume reached 5.3 million tonnes despite a slowdown on US imports and stiff competition from China. Increased freight rates, especially during the second half of 2006, also affected the business. However, export to other countries remained healthy, particularly Vietnam which remains the company’s top export destination.”
To demonstrate the company’s strong financial status, the Board of Directors is pleased to propose to the shareholders the payment of dividends at 14.0 Baht per share for the year 2006, the same as the previous year, based on 16.43 Baht per share earnings, representing 85% payout ratio. Cement products constituted 86% of the group’s net sales, while ready mix concrete and other products represented 11% and 3% respectively.
Company-wide initiatives in line with the “As I wish” campaign, including Occupational Health and Safety and 12 Golden Rules, continued to form part of the company’s corporate culture in 2006. Our competitiveness was enhanced by providing a safer and healthier workplace, further staff development, and improvement in standards of products and services for our customers/end-users. Programs aimed at improving quality and operational efficiency have been successfully implemented. These continue to support and enhance the company’s “Cement Solution Provider” philosophy.
The company announced the investment at approximately Baht 410 million for a new Dry Mortar and Special Cement production plant. INSEE Aggregates starts to support vertical integration growth strategies to capture new business opportunities. CONWOOD launched 6 new wood replacement products in 2006, while EcoSiam business unit was on track in building its pre-treatment facilities for Alternative Fuels and Raw Materials, which is expect to be completed in 2008.
Significant Corporate Social Responsibility projects initiated in 2006 and still ongoing include the Check Dam Project, which supports His Majesty the King’s Royal Development philosophy of ecological balance for sustainable growth. The company has a three years plan in cooperation with the Chaipatana Foundation for the construction of 880 check dams.
The Financial outlook for 2007 remains cautious yet challenging, with modest expectations maintained, given the country’s uncertain economic condition and the current slowdown on projects and capital expenditures.
Siam City Cement said that “The Company has been able to keep up with the challenges of the previous year by making improvements in many aspects of the business. We kept in tune with the changing industry trends and consumer preference through customer-centric product development and other key initiatives. In 2007, we will bring all our efforts up another notch to maintain our competitive advantage in the industry.”
Issued by : Siam City Cement Plc.
For further information : Dr. Staporn Phettongkam,
Secretary General & Corporate Communications
Siam City Cement Plc.
Tel. 0 2797 7060
Pariyanuch Hongsamrerng
( [email protected] )
Ogilvy Public Relations Worldwide
Tel. 0 2205 6000