Siam Cement to Increase Vietnam Investments for Earnings Growth
(Bloomberg) -- Siam Cement Pcl is injecting another $500 million at its biggest petrochemical plant in Vietnam as Thailand’s largest industrial conglomerate ramps up operations in the Southeast Asian nation to halt an earnings slump.
The expansion at Long Son Petrochemicals Complex in the southern part of the country will be completed by 2027 and would raise total spending at the plant to $5.6 billion, said Kulachet Dharachandra, the company’s Vietnam director. Siam Cement has boosted the plant’s total capacity utilization to more than 85% after reopening it in August, he said.
The cement and petrochemicals manufacturer is looking to revive earnings by shifting some of its operations to Vietnam. Siam Cement, whose top shareholder is Thai King Maha Vajiralongkorn, aims to tap Vietnam’s lower costs and growing economy to counter its sluggish performance in Thailand.
“Vietnam has a very promising future in terms of economic growth and urbanization,” Kulachet said. In addition to domestic demand, the Thai company is attracted to Vietnam as an export hub with over a dozen of free trade agreements, he said.
Siam Cement has invested about $7 billion in 28 Vietnam projects, including the Long Son complex, according to Kulachet said.
The company is moving manufacturing of export-bound cement and building materials to the country. The Long Son complex will become its main production base for key chemical products, with 50% of its output for markets including China, Europe and Australia, and the rest for Vietnam, Kulachet said.
The complex, the company’s biggest overseas investment, had been a drag on earnings after it was temporarily shuttered last fall because of weak demand and low chemical prices. The complex is expected to generate $1.5 billion in revenue in 2026 when it is operating at full capacity, and have positive cash flow in 2028, Kulachet said. He did not say when the facility will be profitable.
Long Son’s total sales volume is expected to reach about 400,000 tons by the end of 2025, according to Kulachet. The value of exports is anticipated to be about $700 million next year, he said.
Siam Cement reported a third-quarter net loss of 669 million baht ($20.6 million) compared with net income of 721 million baht a year earlier.
Shares of Siam Cement have gained 9% this year while Thailand’s key benchmark stock index dropped 9%.
(Updates with export volumes in the eighth paragraph, and share price in the last paragraph.)
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