Under this collaboration, Chip Mong will not only be able to sell its products in the Kingdom but we will be able to export
A US$200 million joint venture between Cambodia’s Chip Mong Group and Thai company Siam City Cement Pcl was signed yesterday, paving the way for the Kingdom’s second operating cement factory.
Leang Meng, chief executive of Chip Mong Group, told reporters at a Phnom Penh signing ceremony that the investment was a good opportunity as Cambodia’s continuing development meant it required large amounts of cement.
“Under this collaboration, [Chip Mong] will not only be able to sell its products in the Kingdom but also will be able to export to other countries,” he said.
“We hope that both companies will be able to successfully expand their businesses.”
The contract, signed at Raffles Le Royal Hotel, will see the companies establish a cement plant in Kampot province which can produce about 1 million to 1.5 million tonnes of cement powder per year, said Leang Meng. He said the plant’s construction, set to start next year, will take 24 months and the business is slated to start operating in 2013.
The two companies declined to disclose their relative share in the joint venture.
Philippe Arto, managing director of Siam City Cement, said the contract signaled a major step in promoting business cooperation between the two companies.
“We hope that both companies will mutually share knowledge via this close cooperation,” he said yesterday. He said SCC, which has been established for nearly 40 years, was known in international markets for its sales and production of cement powder – selling to around 70 markets globally, the largest of which are in Europe.
Leang Meng said the venture would tap into such markets.
“We will export our cement products because we want others to know that Cambodia also can produce cement,” he said.
He added cement demand in Cambodia had reached about 2 million tonnes a year, but production was not yet meeting demand.
Cambodia already has one cement factory in Kampot province – a joint venture between Cambodia’s Khaou Chuly Group and another Thai cement company Siam Cement Group.
According to news reports at the time, the operation was built with capital of $127 million and can produce about 1 million tonnes of cement per year.
SCG – Thailand’s third largest publicly traded company by market value – announced yesterday it was selling a 15.6 percent stake in PTT Chemical Pcl for 33 billion baht ($1.1 billion). “The proceeds will provide financial resources to accelerate its expansion and acquisition in the region,” Rattana Leenutaphong, an analyst at IV Global Securities Pcl in Bangkok, said.
Siam Cement’s shares fell 1.4 percent to 342 baht as of 12:24 pm in Bangkok trading.
ADDITIONAL REPORTING BLOOMBERG