Siam Cement Group (SCG) expects its 11 suspended projects in the Map Ta Phut industrial estate should be allowed to start operations within five months, according to president and chief executive Kan Trakulhoon.
The country's largest industrial conglomerate has completed its environmental and health impact assessments (EIA and HIA) required by Section 67 of 2007 Constitution for 11 out of 15 halted projects after completing public scrutiny and reviews. The remaining four projects were delayed indefinitely, said Mr Kan, declining to give further details as most were joint-venture companies.
"After the committee approves the assessments, there will be a public hearing followed by consideration from an independent panel before we are permitted to operate," Mr Kan said at a news conference to announce the company's quarterly results yesterday.
"We think that the total process will take five months, in which projects that are ready to start will be able to operate," said Mr Kan, who added that most of the projects were scheduled to complete construction in the middle of next year.
Although its new cracker is running at 80% capacity, Mr Kan said it would not be able to run fully unless downstream petrochemical projects are also able to start operations.Chief financial officer Roongrote Rangsiyopash said industries had agreed that the government needed to complete its list of harmful activities as soon as possible, in order to create clarity for foreign and domestic investors.
Industrial activities on the list would be subject to the highest levels of screening under Section 67.
The group originally had 18 projects in Map Ta Phut out of 76 ordered suspended by an Administrative Court ruling last September pending further reviews of their impact on the environment and health of communities nearby.
Despite the disruptions, SCG has revised its sales growth forecast for this year to 20-25%, up from its earlier 10% projection, said Mr Kan.
"This is because of the 30% growth in the first half of this year. Also, the chemical sector which represents 50% of total sales, is seeing rapid growth in demand while prices are declining in line with the new output," he said.
For the first half of this year, SCG recorded sales of 146.01 billion baht, an increase of 30% compared to last year. Net profit increased 18% year-on-year to 14.15 billion, driven by the earnings recovery in the paper business.
Second quarter-sales totalled 77.37 billion baht, up 36% year on year and 13% compared to the previous quarter due to volume growth in most businesses.
Net profit totalled 7.3 billion baht, a 7% gain year-on-year and 6% quarter-on-quarter, primarily from the earnings growth of the paper business.
"In the second quarter we beat analysts' forecasts of 6.3 billion baht in profit, partly due to the increased share of chemical products and a lowering in the spread from the end of June," said Mr Kan.
The spread between naphtha and high-density polyethylene (HDPE) has narrowed from $600 a tonne in the first quarter to $400 at present.
"Although this will result in lower prices, SCG's high value-added product sales from the chemical sector have helped sustaining margins and keep them from lowering," Mr Kan said.
