Siam Cement Group (SCG), Thailand's largest cement producer and industrial conglomerate, has raised concerns that prolonged war in the Middle East could drive up global energy costs and disrupt raw material supplies, posing significant challenges to its operations.
Chief executive Thammasak Sethaudom said that if instability continues until this September, global oil reserves could be affected, leading to higher operating costs across industries.
"The peace talks have yet to reach a final conclusion, so there is still risk for global energy prices, crude oil and petrochemical raw materials such as naphtha," he said.
The warning comes after Washington and Tehran signed a memorandum of understanding aimed at ending hostilities between the US-Israel alliance and Iran, including efforts to halt fighting in Lebanon.
However, renewed clashes and Israeli strikes in Lebanon have prompted Iran to reconsider closing the Strait of Hormuz, a critical waterway that had recently reopened, according to media reports.
Before the war, about 20% of global oil and liquefied natural gas shipments passed through the strait.
SCG has already felt the impact of supply chain disruptions.
The company was forced to temporarily shut down its Long Son Petrochemicals facility in Vietnam and its olefins plant in Rayong, Thailand, due to restricted shipments of raw materials.
Mr Thammasak said that SCG aims to reopen these facilities in the third or fourth quarters of this year.
To mitigate risks, SCG is diversifying its supply sources. More than half of its imported raw materials now come from regions outside the Middle East, including the Americas and Africa.
The company is also accelerating efforts to explore partnerships with Chinese firms to expand into China's vast market.
Chinese imports, which account for around 20% of products in the Southeast Asian market, have intensified competition for regional manufacturers, including SCG.
"SCG plans to be partners with Chinese companies, and we want to export our products there," Mr Thammasak said, adding that the firm's manufacturing footprint in Thailand, Vietnam and Indonesia offers opportunities for Chinese investors seeking entry into Southeast Asia.
SCG also operates a packaging business.
