6.  Future Projects

SCG Chemicals

SCG has informed the Stock Exchange Thailand on July 23rd, 2008 that SCG
Board of Director approved the 50:50 joint venture project between Siam
Cement Group and The Dow Chemical Company of the USA (or Dow) to invest
in specialty elastomers downstream plant, which will be located in the
Asia Industrial Estate, Rayong province, Thailand. SCG’s 50 pecent stake
is equivalent to the equity investment portion of approximately Bath
2,400 million. The Specialty Elastomers plant will have a production
capacity of 220,000 tons per year, and is expected to begin commercial
operation in the first quarter of 2011, whereby sales are aimed at both
domestic and regional markets. Specialty elastomers are high value-added
products which exhibit high performance properties in applications such
as packaging sealants and impact modification in the automotive
industry. Raw materials will be leveraged from second naphtha cracker
(known as Map Ta Phut Olefins Co., Ltd.).

SCG has informed the Stock Exchange Thailand on June 9th, 2008 that MTP
HPPO Manufacturing Company Limited, a subsidiary of Siam Styrene Monomer
Company Limited (SSMC) entered into a Technology License Agreement with
The Dow Chemical Company (Dow) of the USA to obtain licenses from Dow in
relation to a propylene oxide project with its nameplate of 390,000 tons
per year. Equity investment for this PO project is estimated at Bath
3,000 million and will be funded by SSMC, which is an associate company
of SCC (50:50 joint venture with Dow). The plant will begin commercial
operation in the first half of 2011. Propylene oxide is a raw material
for the production of polyol and polyurethanes, which are high
value-added products used for a broad range of applications including
automotive, construction, appliance. Raw materials for Propylene oxide
production will be a) propylene, which will be supplied by Map Ta Phut
Olefins Company (SCG’s second naphtha cracker and a 67:33 joint venture
with Dow), and b) hydrogen peroxide, which will be supplied by Dow’s
joint venture with Solvay S.A.

SCG has informed the Stock Exchange Thailand on March 20th, 2008 that it
entered into a joint venture agreement with Vietnam Oil and Gas Group
(Petrovietnam) and Vietnam National Chemical Corporation (Vinachem) to
develop Vietnam’s first world-scale petrochemicals complex. Through its
subsidiary Vina SCG Chemicals Company Limited and its consolidated
associated company Thai Plastic and Chemicals Public Company Limited
(TPC), SCG is expected to hold a combined 71 percent stake in the
project. This petrochemicals complex will consist of a) cracker with
olefins capacity of 1.65 million tons per year, b) polyolefins of 1.45
million tons per year, c) Chlor-Alkali of 280,000 tons per year, and d)
PVC-related capacity of 730,000 tons per year. Supporting
infrastructures such as port and storage facilities, and supporting
utilities is also included in the total final investment cost. The total
project investment will be approximately USD 3.5-4.0 billion. The
Greenfield petrochemicals complex will be located on Long Son Island in
southern Vietnam (province of Ba Ria Vung Tau), which is adjacent to
Vietnam’s third oil refinery for operational synergy. The complex is
expected numerous derived synergies with important Vietnamese industries
such as automotive, consumer good packaging, and aluminum.

SCG has informed the Stock Exchange Thailand on November 28th , 2007
that it has reached a Technology License Agreement with The Dow Chemical
Company of the USA (or Dow) to invest in a second LLDPE downstream plant
worth Bath 10,400 million (USD 315 million), with an expected debt to
equity ratio of 60:40. Moreover, SCC will hold a 50 percent stake in
this investment, or equivalent to approximately 2,100 million Baht (USD
63 million). The LLDPE plant is expected to begin commercial operation
in the first half of 2010. This second LLDPE plant will emphasize the
production of LLDPE C6 and C8 grades which are high-value added products
prevalently used in the packaging industry. The raw materials for this
second LLDPE plant will come from SCG’s second naphtha cracker.

SCG has informed the Stock Exchange Thailand on January 24th, 2007 about
the investment plan to increase the production capacity of Thai MMA
Company Limited, joint venture between SCG and Mitsubishi-Rayon Company
Limited of Japan, by the capacity of 90,000 tons per year of the second
MMA line and continuous cast sheet line with the capacity of 20,000 tons
per year. The expected start-up for the second MMA line is the second
quarter of 2010, while the start up for continuous cast sheet line is
the forth quarter of 2009. MMA is an important element in the production
of plastic sign boards and signal lights, which are related to the
advertising and automotive industries, while continuous cast sheet is an
important element in the production of light guide panel in LCD, which
is related to the electronics industry. In terms of production, MMA will
source its raw material from SCG’s second naphtha cracker, while
continuous cast sheet will use internal source of MMA as raw material.
Both projects are located in Rayong province and the total investment of
these two projects is around Bath 10 billion, while SCG’s total equity
portion for these two projects will amount to approximately Bath 2,500
million.

SCG has informed the Stock Exchange Thailand on October 25th, 2006 that
both SCG and The Dow Chemical Company of the USA (or DOW) have finalized
the SCG’s second naphtha cracker investment in Thailand, as a result of
the Board approval at both SCG and DOW. The naphtha cracker will have an
annual Olefins capacity of up to 1.7 million tons (ethylene 900,000 tons
and propylene 800,000 tons, and other products of up to 700,000 tons).
Following the final agreement with contractors and suppliers, the total
cost of the naphtha cracker will amount to approximately Bath 45,600
million. SCG will hold a 67 percent stake in the project, while DOW will
hold the other 33 percent stake. Utilizing proven Olefins conversion
technology which maximizes propylene output, the cracker will generate
75 percent more propylene than its existing naphtha cracker, as a large
majority of the new Olefins plant additions will be gas-based capacity
from the Middle East which will have very little propylene and
by-products capacity.

In addition, SCG Chemicals will also be moving ahead with its earlier
announced downstream expansion. Integrated into the second naphtha
cracker, the approximately Baht 17,100 million wholly owned downstream
operation with a total capacity of up to 800,000 tons per year will
comprise of HDPE capacity of 400,000 tons per year and PP capacity of
400,000 tons per year. Slated for 2010 start up, the downstream
operations will emphasize the production of high value non-commoditized
products by using modern technology, while leveraging SCG Chemicals’
existing domestic and regional distribution network.

SCG has informed the Stock Exchange Thailand on June 2nd, 2005 that it
has entered into an approximate Baht 8,820 million (USD 225 million)
joint venture with Iran, Itochu Corporation of Japan and PTTCH to
produce High Density Polyethylene (HDPE) with the production capacity of
300,000 tons per year. SCC will retain a 38 percent stake in the
project. This initiative is in line with SCG’s medium term growth
strategy to expand the production capacity while using the lowest cost
petrochemicals feedstock. The project is expected to start commercial
operation by mid 2009 in response to the ever increasing regional demand
of petrochemicals products.

Thai Plastic and Chemicals Public Company Limited prepared the plan for
PVC Resin Line # 2 expansion at production capacity of up to 90,000 tons
per year in Vietnam through the joint venture company named TPC Vina
Plastic and Chemicals Corporation Co., Ltd. (TPC Vina), in response to
the increasing PVC demand in Vietnam. The project is planned to use some
of machines from production line of Samutprakarn plant which is coming
to discontinue its operation. It is expected that the project will be
completed in 2009 with estimated investment cost of Bath 1,300 million.

SCG Paper

SCG Paper PLC remains focus on its continuous growth strategy by finding
new business opportunities whilst following a prudent investment
approach. Such strategy is in line with SCG’s policy to be the leader of
ASEAN as well as its commitment to enhance effectiveness of existing
machineries. Key future investments include sheetboard capacity
expansion to 55,000 tons per year in Khon-Kaen and the building of kraft
paper manufacturing plant in Vietnam with capacity of 220,000 tons per
year.

SCG Distribution

SCG Experience (Lifestyle Centre) project is a products and innovation
exhibition hall with its investment of approximately Baht 400 million.
The project is located on Pradit Manutham Rd. and expected to service in
the third quarter of 2009.