Equity Analysis /

Siam Cement: Brilliant growth prospects with strong ESG commitment

  • Chemical business—hefty growth with sustainability

  • Cement-Building Materials business—cost management with low carbon transition

  • Packaging business—continual growth

Suppata Srisuk
Suppata Srisuk

Equity Research Analyst

Bualuang Securities
29 November 2021

We hosted a virtual roadshow for domestic investors last Friday. The investors were broadly optimistic about SCC’s future growth prospects and its competency in tackling challenges. The key topics of discussion at the meetings are summarized below:

Chemical business—hefty growth with sustainability

SCC’s Chemical business looks set to deliver substantial growth over the next few years with the start-up of Long Son Petrochemicals (LSP) project in Vietnam. The overall progress of LSP project was 87% as of 3Q21 (as scheduled) and the commercialization is expected to be in 1H23. This will boost SCC’s production capacity by 55% to 8.3mt/year by 1H23. LSP will be the first fully integrated petrochemicals complex in Vietnam where the demand growth is amongst the highest in Asia Pacific and will remain a net importer of polyolefins in the foreseeable future. More interestingly, LSP has the key advantage of high flexibility in feedstock usage (between naphtha and propane; it is designed to use up to 30-70% propane), enabling the firm to maximize earnings from cheaper feedstock costs.