IA Cement Advisers

ASEAN Cement Markets

Cemtech Asia 2021

Advisers to the global cement industry

IA Cement
Advisers to the global cement industry

❑ Founded in 2011 ❑ Over 20 years cement experience

❑ Based in London & Jakarta ❑ enquiries@iacement.com

Services Reports
❑ Market studies ❑ Cement on the Stock Market
❑ Stock market advice ❑ Annual global demand
❑ M&A ❑ Regional outlooks
❑ Feasibility reports ❑ Company reports
❑ Trade/equipment introductions ❑ Multi-national strategies
 Global Context
Global cement demand breakdown, 2021E

Cambodia 9mt
Rest of Asia 12% Malaysia 19mt

Vietnam 64mt
Africa 5%

Brunei 0.3mt
China 59% Thailand 29mt
ASEAN 6% Myanmar 6mt
Philippines 32mt
Laos 4mt
Europe 6%
North America 3% Indonesia 67mt
Latin America 4%
Middle East 5% Singapore 4mt

❑ Ten ASEAN countries make up 6% of global cement demand;

❑ Significant excess capacity;
❑ Coronavirus hit the region hard in 2020;
❑ Modest recovery in 2021.

First In, Last Out?

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Consumption Outlook
2021E Cement demand growth 2021E Average prices ($)

Malaysia

Thailand Vietnam Vietnam

Philippines
Key Philippines

6-8% Thailand
Malaysia
3-5% Indonesia
Indonesia
0-2%
0 20 40 60

❑ Recovery is sluggish and uneven;

❑ New virus waves are widespread amid slow vaccine rollout;
❑ Cement exports are increasing;
❑ Rest of the world is performing far better.

Lagging behind
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Indonesia
Cement demand, 1997-2021E Market share

80
70 Others 13% Indocement
60 (HC) 22%
Cemindo
50 Gemilang 7%
40
30 Conch 8%

20
10 Bosowa 6%

0 Semen
1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 Indonesia 44%

❑ Demand is picking up; 2021E – key metrics

Capacity (mt) 115
❑ Public works projects are resuming;
Demand (mt) 67
❑ Selling prices likely to rise further; Utilisation 58%
Net Trade (mt) 9.5mt exp
❑ Excellent long-term potential. Per capita demand 242

Solid prospects
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Thailand
Cement demand, 1997-2021E Market share

40
Others 2%
35
30 TPI 22%

25
SCG 38%
20
15
10
5
Siam City
0
Cement 26%
1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021
HC 12%

❑ Demand is still below 1997 peak; 2021E – key metrics

Capacity (mt) 60
❑ Modest recovery in 2021;
Demand (mt) 29
❑ Structural excess supply; Utilisation 48%
Net Trade (mt) 14mt exp
❑ Selling prices are down. Per capita demand 414

Modest recovery
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Malaysia
Cement demand, 1997-2021E Market share

25
CIMA 19%

20

15 Tasek 6%

YTL 56%
CMS 7%
10
Aalborg 1%
5
Hume 9%
Sabah 2%
0
1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021

❑ Construction impacted by fresh lockdown; 2021E – key metrics

❑ New stimulus to support the economy; Capacity (mt) 39
Demand (mt) 19
❑ Limited upside over the long-term; Utilisation 49%
❑ Major overcapacity. Net Trade (mt) 1.3mt exp
Per capita demand 580

More consolidation needed

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Vietnam
Cement demand, 1997-2021E Market share

70 Xi Xuan Thanh
8%
60
Siam City 5%
50

40
Others 43%
30
Vicem 26%
20

10
Nghi Son (Taiheiyo) 4%
0
1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 Vissai 7% Taiwan Lucky 7%

❑ Strong economic recovery; 2021E – key metrics

❑ Cement demand growth is lagging the economy; Capacity (mt) 120
Demand (mt) 64
❑ Exports still rising sharply due to chronic overcapacity; Utilisation 53%
❑ Selling prices remain low. Net Trade (mt) 40mt exp
Per capita demand 652

Modest 2021 growth

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Philippines
Cement demand, 1997-2021E Market share
40
Others 13%
35
30
Holcim 26%
25
20 CRH Aboitz
15 19%
10
5 Cemex 14%
Taiheiyo 6%
0
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
1997
1998
1999
2000
2001

2021E
Eagle 22%

❑ Demand down again in Q1; 2021E – key metrics

Capacity (mt) 39
❑ Housing is the main driver of growth;
Demand (mt) 32
❑ Anti-dumping investigation; Utilisation 82%
Net Trade (mt) 7mt imp
❑ Low per capita demand. Per capita demand 288

Strong recovery anticipated

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Other countries
Cement demand outlook, 2021E

Key
Myanmar
8-12% Laos
5-7% Cambodia

0-2%
Brunei
Down 20-30%
Singapore

❑ Singapore to recover after a difficult 2020;

❑ Military coup in Myanmar;
❑ New coronavirus waves in Laos and Cambodia;
❑ Higher oil prices to help Brunei.

Mixed prospects

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 Ownership/M&A
Market share (%) Indonesia Thailand Philippines Vietnam
Globals
Conch 8%
Holcim 26%
HC 22% 12%
Cemex 14%
CRH 19%
Regionals
Taiheiyo 6% 4%
SCG 2% 38% 3%
Siam City Cement 26% 5%
Semen Indonesia 44% 1%
TOTAL 76% 76% 65% 13%
Note: the Taiheiyo investment in SBI is not incorporated in the table above

❑ Multi-nationals have reduced their presence;

❑ Regional players are expanding into smaller markets;
❑ Too many new entrants.

Excess capacity in most markets

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CONCLUSIONS

❑ Coronavirus has had a deep regional impact.

❑ New waves and variants remain a risk.
❑ Demand recovery proving to be slow.
❑ Oversupply is a key problem.

THANK YOU & STAY SAFE!

Reach us at enquiries@iacement.com

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