Phoenix, Siam Cement 'just good friends'

Phoenix, Siam Cement 'just good friends'

BANGKOK (Reuters): A top executive of Thailand's Phoenix Pulp
& Paper Plc on Friday denied rumors of an imminent merger with
Siam Cement Plc, saying the two were "just good friends".

Siam Cement, the country's biggest conglomerate, is one of
Phoenix's best customers, the pulp firm's executives said.

Phoenix shares have risen sharply this week following comments
by officials of Siam Cement that they had been considering buying
a large number of shares in Phoenix for several months.

Phoenix jumped almost 14 percent on Friday to 43.50 baht after
widespread speculation in the Thai media that a merger would be
announced soon. The Thai benchmark composite SET index was up
just over one percent on Friday.

But Phoenix officials told Reuters there had been no formal
discussion on a merger with Siam Cement.

"Siam Cement has not told us anything," Phoenix Executive
Director Vashi Purswani said in an interview.

"If investors want to sell the shares, it is their decision,"
he said. "Siam Cement is our best customer and we have a very
good relationship with them," he said. "We are just good friends.

"The company has no role in this (acquisition deal). The
decision is up to the shareholders," he said. "As the management
we can not say anything."

Phoenix is Thailand's largest producer of pulp for sale and
had a turnover of 3.75 billion baht in 1999 resulting in a net
profit of 702 million baht.

In the first nine months of 2000, Phoenix turned in a net
profit of 1.64 billion baht.

Barra's Estimate Directory shows an average market average
consensus of a net profit of 2.08 billion baht in 2000 and 2.13
million in 2001.

Based in northeastern Thailand, Phoenix produces about 200,000
tons per year of pulp from bamboo, eucalyptus, and kenaf. It
exports about 50 percent of its product to China, Indonesia,
Europe, Malaysia and the Philippines.

The company sold 36 percent of its pulp to Siam Cement last
year, representing about 70 percent of Phoenix's domestic sales,
Purswani said.

Chief Finance Officer A.S. Banthis said he did not expect
problems dealing with Siam Cement if there were to be an
acquisition.

"There may be a slight adjustment in working cultures, that is
all. We are professional managers," he said. "Last year they
wanted to sell us their paper business. It's funny how things
change," he added.

Purswani said the company expected a strong performance in
2000 and in 2001 despite a downward trend in global pulp prices.

"In 2000 we have topped everything, maximum sales value wise
and maximum profit," he said.

Banthis said the company's fourth quarter results could be
extrapolated from the results of the first three quarters.