28 March 2005 00:01 [Source: ACN]
THREE months have passed since the tsunami that destroyed much of Aceh in Indonesia and wrecked seaside resorts and villages in Thailand. But chemical companies, especially those producing polyvinyl chloride (PVC), that had been expected to benefit from the subsequent reconstruction efforts said demand for their products had not increased so far.
In Indonesia, a chemical company source said a government project to build a clean-water system for Aceh should lead to demand for a few hundred tonne of PVC pipes. However, he noted that only one PVC pipe producer had expressed its willingness to take part in the project. He declined to name the producer. He said a common concern among pipe producers appeared to be uncertainty of government funding.
In an earlier interview with ACN, the president director of Asahimas Chemical, Takuya Shimamura, said ‘we have not received increased orders for PVC, probably because it is still too early, as PVC pipes are needed only in the later stages of building construction’ (ACN 14 March 2005).
In Thailand, while some industry sources expected the government’s reconstruction schemes to boost domestic PVC demand, an official from Vinythai said any growth in PVC demand would be minimal.
He explained: ‘The rebuilding efforts would be concentrated on the resort areas that were hit by the tsunami. But it is in the city that you find the main infrastructure. As a result, the demand for PVC may not increase by more than 5-6% in 2005 from last year’s demand of 750 000 tonne.’
An analyst from CLSA Thailand said a recovery of the Thai construction market was likely to help PVC demand in the long term, but he added that the short-term impact was difficult to assess. He said Thai PVC demand should grow by 4.4% this year if there was a delay in reconstruction work, and by 10.5% if there was no delay.
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