The Board of Directors of The Siam Cement Plc (or ?SCC?) has approved a 5,200 MB investment in a Vietnamese packaging paper plant with the capacity of 220,000 tons. The plant will be located in the vicinity of Ho Chi Minh City, and is expected to begin production by mid-2009.
The new capacity in Vietnam will effectively increase SCC?s packaging paper capacity to 1,740,000 tons per year (1,320,000 tons Thailand, 200,000 tons Philippines, and 220,000 tons Vietnam).
Vietnam is a rapidly developing nation, with a large demand for packaging paper that is estimated at 580,000 tons per year (of which 45% is imported) in 2006. This demand level amounts to a per capita consumption of approximately 7 kg/year, compared to Thailand?s per capita consumption of approximately 32 kg/year, with forecasted demand growth of 10-15% during the next 10 year. Furthermore, Vietnam has been a major export market for SCC?s packaging paper during the past 10 years, and export volume to Vietnam this year is approaching 100,000 tons.
This Vietnamese paper investment is just one of SCC?s strategic initiatives to undertake a regional geographical expansion in its core businesses. Moreover, this investment will allow SCC to further capitalize upon its existing market position in Vietnam, while becoming more competitive with direct access to a growing market, and abundant energy source.