Oct. 29--Siam Cement Group (SCG), the country's largest industrial conglomerate, is hopeful of a better fourth quarter when some of its businesses should turn around and resume their upward trend.

President and CEO Kan Trakulhoon said revenue in the next quarter would be pressured by the petrochemical business, which accounts for almost 40 percent for the group's revenue, because global prices have slumped and the spread margin has narrowed.

But cement and construction, SCG's other core business unit, has grown much stronger, to the extent that it could sustain overall performance.

Mr Kan hopes government infrastructure spending and the global economic recovery will improve confidence in the property sector, which will benefit the group's cement and construction materials business in the fourth quarter.

"As the last quarter is also a dry season, cement demand and prices should improve when many construction projects resume," said Mr Kan.

"I believe we will perform better than last year in the fourth quarter because of no inventory losses. I also hope we will perform better on a quarterly basis."

SCG reported net sales of 64.54 billion baht, a 13 percent rise from the previous quarter, on improved product prices. The sales, however, dropped 19 percent year-on-year due to higher prices last year.

SCG's third-quarter net profit was 6.99 billion baht (5.82 baht a share), against 5.94 billion baht (4.95 baht a share) a year earlier.

Nine-month consolidated net profit was 19 billion baht (15.84 baht a share), down 5 percent from 20.2 billion (16.88 baht a share) in the same period last year.

Mr Kan projected that annual sales would contract by about 20 percent, but net profit is likely to rise on better product prices and cheaper raw materials.

For next year, the uncertainty around Map Ta Phut will continue to be the main concern as SCG's ongoing projects in the industrial estate are worth 106 billion baht in total.

"The impact is yet to be assessed. We are still waiting for the court's final decision. Some of our projects are due to start early next year while some will be completed in 2011," Mr Kan said.

"If the projects due to begin operations next year are delayed, the expected annual income of 60 billion baht from them will be missing from 2010's performance."

Its olefins plant has a capacity to produce 900,000 tonnes of ethylene yearly and 800,000 tonnes of propylene to serve export markets.

SCG began conducting a health impact assessment (HIA) on some projects in Map Ta Phut in July, even before the Administrative Court ruling and in the absence of official guidelines.

While domestic projects face uncertainty, its delayed petrochemical project in Vietnam has resumed on signs of economic revival.

"We have appointed a financial consultant while a technical team is working at full capacity. We are in the process of seeking financing and is reassessing the investment value to see if it still is suitable for the current economic environment," he said.

Also, its petrochemical project in Iran has resumed after a 13-month delay. A plan to join with potential partners in Asean in its core businesses is also active. It is in talks with smaller companies for investments worth billions of baht.

Mr Kan is optimistic that the global economy is improving at a modest rate and that Thailand's GDP should be higher than forecast by many agencies.

"Overall, the yearly GDP will be better than many anticipated. If the Thai Khem Kaeng project proves effective, we will be in a better position next year," he said, adding that he hoped to see SCG reap benefits from the public spending.

Siam Cement shares (SCC) closed yesterday on the SET at 210 baht, down 1 baht, in trade worth 167.55 million.

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