Lafarge, SCC keen to grow
France-based Lafarge, the world's leading building-material group, is looking forward to strengthening its partnership with Siam Cement in Thailand and overseas.
"A number of projects are being discussed. Details will be announced after the deals are reached," said Ulrich Glaunach, CEO of Lafarge Roofing.
Headquartered in Germany, Lafarge Roofing has been in a joint venture partnership with CPAC Roof Tile for several years, with ownership of 25 and 75 per cent respectively. Meanwhile, Lafarge Boral Gypsum last year acquired 71 per cent of Siam Gypsum Industry, previously a wholly-owned subsidiary of the Thai industrial conglomerate.
The French company has not been involved in the local cement business, which is Lafarge's largest business division worldwide. Its global competitors, including Holcim, have acquired controlling stakes of local cement companies.
But due to its solid financial status, Siam Cement is the only local cement maker which has no equity partnership with foreign companies at this stage.
Speaking during his recent visit to Thailand, Glaunach said Lafarge and SCC had joined for investments overseas, starting with the Philippines and Cambodia. These ventures, with the same equity ratio as CPAC, have been set up to operate facilities without local partners.
Roofing is a domestic market-oriented industry due to the heavy weight of the products. Thus, CPAC prefers establishing its operation in each market instead of exporting from Thailand, said Glaunch, pointing out that Indochina, with a high annual growth rate, was interesting.
The Thai market showed great potential, he said, especially in the upper segment, for both roofing materials and accessories. Even though the Thai market has resumed slower growth compared to neighbouring countries, the roofing business was expected to show "more consistent development".
Combining the strengths of the two partners has resulted in better market segmentation of CPAC over competitors, while Lafarge's global operations have benefited the joint venture in terms of bargaining power for purchases of raw materials, and research and development.
Thailand ranks as the fourth largest roofing market in Asia, after China, Indonesia, and Japan. However, the Indonesian market is very volatile.
Manoon Vongthongsri, managing director of CPAC Roof Tile, said the local roof-tile market was targeted to grow at the same rate as last year — about 15 per cent — after shrinking by half since the economic crisis.
Despite utilising less than half its capacity, Manoon said CPAC resumed profitability in 2000 and recorded sales of almost Bt1 billion last year.