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Siam Cement cuts FY sales view on weak private-sector investment

[BANGKOK] Siam Cement PCL, Thailand's largest industrial conglomerate, has lowered its sales growth forecast for this year due to sluggish investment in the private sector, its chief executive officer said on Wednesday.

Siam Cement, whose earnings are widely considered a barometer of Thailand's corporate health, now expects sales to grow 3 per cent to 5 percent, rather than 5 per cent to 10 per cent forecast previously. Sales grew 3 per cent in the first half.

"We don't expect to reach our prior target of 5 to 10 per cent sales growth due to low private-sector investment," Roongrote Rangsiyopash said at a news conference.

Southeast Asia's second-largest economy has yet to fully recover since an army coup in 2014 ended months of political unrest, with growth still lagging regional peers.

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"Demand for cement and building materials was slow and we hope to see a recovery but don't think it will turn positive," Mr Roongrote said.

The firm expects domestic cement sales across the industry to contract 5 per cent this year to 37 million tonnes, against an earlier forecast range of 1 per cent to 3 per cent growth.

First-half sales in the industry fell 7 per cent.

Siam Cement, 30 per cent owned by the Thai royal family's Crown Property Bureau investment arm, posted second-quarter net profit of 13.3 billion baht (S$540.9 million), down 17 per cent from a year earlier.

The conglomerate lowered its capital expenditure plans for this year to a range of 50 billion to 60 billion baht, from 60 billion to 70 billion baht, it said in a statement.

The firm is still studying the construction of a second petrochemical plant in Indonesia with local firm PT Chandra Asri Petrochemical Tbk and will take about a year to reach a decision, Mr Roongrote said.