INSEE Cement reinforces growth strategy in dull retail trade
Despite the current political upheaval and an economic downturn, one of Sri Lanka’s top cement producers is optimistic on the future of construction sector and its progress.
Siam City Cement Board Chairman Paul Heinz Hugentobler, having an in-depth knowledge in Sri Lanka’s market conditions with over 25 years-experience in the industry, expressed these views while speaking to journalists at a roundtable discussion in Colombo on Tuesday.
He pointed out that the country’s cement market currently depends on industrial customer segment but there was not much sales in the urban and rural retail segment.
However with major projects recommencing, there was a upward trend not only seen in massive infrastructure developments, but also in the high-rise apartment complexes and luxury hotels especially in Colombo, the company is hopeful for better demand with the evolving infrastructure developments.
Small and large scale construction activities will also continue to develop despite the slowdown of the individual house construction and building sector in theface of the consumer shift towards living in very expensive compartments, he opined.
The company is fully geared to meet the demand for ‘engineered concrete’ and commercial ready-mix as the country’s high rise mega commercial building construction is now underway.
INSEE Cement or Siam City Cement (Lanka) Ltd, a member of the Thai-based Siam City Group, cannot afford to take it easy as the competition is heating up with cheap cement exporters in the present dull market, he said.
INSEE Cement has diversified its operations through innovative solutions with the new wave of competitions by going beyond normal cement production while introducing a novel concrete pumping system for skyscrapers and ready-mix cement in a big way, he revealed.
A sum of over US$ 20 million will be invested in addition to $200 million during the past two years to boost cement production in the country, Mr. Hugentobler disclosed.
Three ready-mix cement plants are to be built in Peliyagoda, Ratmalana and the Colombo suburbs, he disclosed adding that the company’s new $50 million grinding plant would be opened in Galle Port by August this year.
Referring to new innovations in the building materiel segment, Mr. Hugentobler said that their CONWOOD products, an architectural and decorative building material, turned out with ultramodern Swiss technology will be popularised as a substitute for authentic wood products used in residential and commercial buildings.
INSEE Cement has signed a Memorandum of Understanding (MOU) with the National Enterprise Development Authority (NEDA), in a bid to further advance Sri Lanka’s construction industry standards through the development of skill, knowledge and craftsmanship of masons islandwide, he disclosed.
The company has always been committed to long term development of its people and stakeholders including construction industry workers, he said pointing out that the company produces the first ‘Green Cement” in Sri Lanka with the green labelling certification awarded by the Green Building Council.
In addition it operates a sustainable waste management unit called INSEE Ecocycle in Puttalam with its pre-processing facility in Katunayake, he revealed saying in a lighter vain that “this facility which destroys industrial waste has burnt $108 million in no time.”
He was commenting on the disposal of $108 million worth haul of cocaine in January this year.
Mr. Hugentobler revealed that INSEE Ecocycle, joined hands with the Sri Lanka Police Narcotics Bureau (PNB) and National Dangerous Drugs Control Board (NDDCB) to responsibly dispose 928.2 kg of waste cocaine hydrochloride through cement kiln co-processing for the first time in Sri Lanka.
INSEE CEO Nandana Ekanayake revealed details of industry insights and the company’s latest innovative solutions and technologies while stressing the need for a price revision of a bag of cement in the face of high production costs and overheads.
The growth in the retail sector which is primarily depending on agricultural income and the housing loans homebuilders can obtain from banks has been affected by prolonged drought and recent floods as well as the high interest rates.
The demand in the bag segment has slowed down recently due to the prolonged drought, which has greatly impacted the agriculture sector, while demand in the bulk segment shows positive results due to the current strong performance in the industrial sector.
The country could expect a 6-7 per cent growth in demand over the next two years, he said, adding that the government’s plan to build over 3000 km of roads including hundreds of km of flyovers and expressways as well as the Colombo Port City project will result in increasing the value of the construction industry.