SET-listed Siam Cement Group (SCG), Thailand's largest cement maker and industrial conglomerate, expects its energy and operating costs as well as expenses for raw materials to increase if conflicts in the Middle East escalate.
The company is closely monitoring the impact of geopolitical conflicts on the economy and SCG's businesses, said president and chief executive Thammasak Sethaudom.
"We are worried the conflicts in the Middle East may grow out of control, increasing global oil and coal prices. This will eventually cause businesses to shoulder more operating costs," he said.
The latest attacks between Israel and Iran raised fears it would lead to a surge in global oil prices.
Despite the external negative factors, SCG remains positive about the Thai economy, believing it will continue to revive and keep growing, driven by tourism and the government's economic stimulus measures.
SCG has decided to delay its Long Son Petrochemicals (LSP) complex in Vietnam, which was earlier scheduled to start commercial operation in the first quarter of 2024. A new date has been set in the third quarter of this year.
Mr Thammasak attributed the postponement to a safety problem found during a test-run of the petrochemical production facility.
Total investment in the LSP complex stands at US$5.4 billion.
SCG yesterday reported its operating results for the first quarter, showing an improvement compared to the previous quarter driven by green innovations, effective cost management, a rebound in tourism and signs of economic recovery in the country.
Despite global economic fluctuations and a downturn in the petrochemical sector, SCG saw its revenue increase by 3% quarter-on-quarter to 124 billion baht.
Its earnings before interest, taxes, depreciation and amortisation stood at 12.6 billion baht, up 16% quarter-on-quarter, with profit reaching 2.4 billion baht, an increase of 3.5 billion baht quarter-on-quarter.