SET-listed Siam Cement Group (SCG), Thailand's largest cement maker and industrial conglomerate, has cut its projected total revenue for 2019 by 5-10%, mainly due to weaknesses in its petrochemical business.
Recently SCG announced its total revenue in 2019 would increase 5-10% from its 2018 revenue of 478 billion baht because petrochemical crude oil prices will vary amid the global economic slowdown, while sales volume will drop.
Roongrote Rangsiyopash, president and chief executive, said petrochemicals accounted for almost 50% of overall business, and global petrochemical prices continue to drop by 10-20%.
"The spread in petrochemical prices today is US$573 per tonne, down from $639 in the fourth quarter of 2018," Mr Roongrote said. "While global crude oil prices are strong, they may vary, with crude bouncing to $80 per barrel from $50."
SCG expects the Eastern Economic Corridor scheme will drive the construction sector to expand and will impact the cement market.
"In the first quarter of 2019, domestic cement rose by 2% year-on-year, but SCG expects the second quarter will slow down because of many holidays and the rainy season," he said.
SCG affirmed its investment budget of 60 billion baht in 2019 for expanding investment projects, both domestic and overseas.
The company plans to spend the budget on a petrochemical complex in Vietnam, the Map Ta Phut olefins debottlenecking project, a packaging business in the Philippines, R&D and startups.
Last year, the company spent an investment budget of 46 billion baht.
SCG reported first-quarter revenue was 112 billion baht, a decrease of 4% quarter-on-quarter and 5% year-on-year, mainly from lower chemical product prices because of weak global demand.
Profits for the period tallied 11 billion baht, up 11% quarter-on-quarter, thanks to all businesses performing better than the previous quarter, but fell 6% year-on-year as its chemicals group saw lower product margins.
