Siam City Cement and the Chip Mong Group will co-build a new cement plant in the Toukmeas district of Kampot by 2015 in order to take advantage of the “huge” demand in Cambodia.
The plant will cater specifically to the Cambodian market, although they will also consider exporting as well.
The demand primarily comes from the construction sector in its drive to expand Cambodia’s infrastructure, a reflection of rapid economic development.
“The demand [for cement] is huge,” said Sok Chantha, public relations manager for the Chip Mong Group.
A memorandum of agreement was signed between the two companies on December 8 for a feasibility study into a plant with the capacity of 1 to 1.5 million tonnes per year.
The construction of the joint cement plant will take place next year and is expected to take two and a half to three years to complete.
Although it will cost around $200 million, the expense is not an issue.
“The plant will be high-tech and modern,” promised Sok Chantha.
Despite the competition this new plant brings to Cambodia’s cement industry, Ouk Bunseng, deputy plant manager for the Cambodia Cement Chakrey Ting Factory said he was “not so worried” about a new rival.
“I’m ok,” he said. “[Cambodia] is a free market, so anyone can set up their business here.”
He also cited an investigation his company had conducted, showing an increase in demand of about 14 to 18 per cent.
Good-quality cheap cement is hard to source, however, according to the Ministry of Public Works and Transportation.
“Concrete roads are stronger, but they are [also] more expensive,” director of the Road Department, Nou Vaddhanak, said.
“Because of this, the majority of Cambodia’s roads will be made with asphalt.”
Siam City Cement and the Chip Mong Group’s ambitious million-tonne per year production plan will place it as one of largest domestic companies in Cambodia and help the domestic market.