Deploying 5 strategies to tackle the global economic crisis including 1.) tightening expenses, lowering costs, increasingly use of biomass and solar energy, 2.) consistently push for innovative products and services, 3.) increasing financial liquidity, 4.) Reassessing and carefully prioritizing strategic investments such as LSP (96% progress) and partnering a major packaging material recycling operator in the Netherlands; and 5.) accelerating ESG with eco-friendly innovations, continuing occupational development programs to help reduce inequality and creating stable income.
Mr. Roongrote Rangsiyopash, President & CEO, SCG discloses that “Despite volatile situations with crisis upon crisis such as inflation, rising interest rates, increased energy and raw material costs as well as climate change, SCG continues to adapt, resulting in strong overall business and financial performance. Innovative product and service developments are in full gear, especially eco-friendly items with SCG Green Choice labels and innovations to meet consumers’ demands for safety and convenience, catering to the tourism and service sector’s recovery as borders fully open. Moreover, strategic investments are being prioritized, resulting in the delay of new projects that are non-urgent while still going through with quick-return projects and ones that are aligned with the company’s long-term growth plans. This includes the LSP petrochemical complex project in Vietnam and SCGP’s partnership with Peute, the largest packaging material recycling business in the Netherlands.”
The Company’s unreviewed Operating Results for Q2/2022 registered Revenue from Sales of 101.7 Trillion VND (US$ 4.4 Billion), a flat q-o-q and an increase 14% y-o-y mainly due to higher sales across all businesses from higher product prices in-line with market prices. Profit for the Period is 6.6 Trillion VND (US$ 289 Million), a decrease 42% y-o-y from rising feedstock costs in the Chemicals business following global oil prices as well as lower equity information at Chemicals business. Profit for the Period registered an increase 12% q-o-q due to dividend income from investments businesses.
SCG’s Revenue from Sales for the first half of 2022 rose 19% y-o-y to 207.3 Trillion VND (US$ 9 Billion)
SCG’s Revenue from Sales of High-Value Added Products & Services (HVA) for H1/2022 reached 69.6 Trillion VND (US$ 3.1 Billion), or 34% of total Revenue from Sales. New Products Development (NPD) and Service Solution such as SCG Hybrid Cement and Hygienic Tiles, made up 17% and 5% of total Revenue from Sales respectively.
SCG’s Revenue from operations outside of Thailand together with export sales from Thailand for H1/2022 registered 90.5 Trillion VND (US$ 4 Billion). This constituted 45% of total Revenue from Sales, an increase of 1% y-o-y.
SCG in ASEAN (ex-Thailand)
For SCG’s operation in ASEAN (ex-Thailand), the Revenue from Sales in Q2/2022 recorded a 78% increase y-o-y, amounting to 28.5 Trillion VND (US$ 1.2 Billion), and 28% of SCG’s total Revenue from Sales. This includes sales from both local operations in each ASEAN market and imports from the Thai operations.
As of 30 Jun 2022, the total assets of SCG amounted to 595.3 Trillion VND (US$ 25.6 Billion), while the total assets of SCG in ASEAN (ex-Thailand) were 268.9 Trillion VND (US$ 11.6 Billion), 45% of SCG’s total consolidated assets.
In Q2/2022, SCG’s total asset in Vietnam was 151 Trillion VND (US$ 6.5 Billion), an increase of 24% y-o-y mainly in the chemicals business from Long Son Petrochemicals (LSP) and packaging business.
The company reported Q2/2022 Revenue from Sales at 11.1 Trillion VND (US$ 482 Million), up 13% y-o-y mainly from the new partnership of DuyTan, a rigid plastic packaging products producer of SCGP (packaging business).
Understanding the need for comfortable living spaces amid escalating global climate change, SCG CBM introduced the latest SCG Roof Elite series. This premium roof tile with double coating technology provides long-lasting color bonding for up to 10 years. Besides, tests featured under regional extreme weather conditions certified that they help prevent heat absorption, dust, and moss, bringing utmost comfort to Vietnamese homes.
SCG in Vietnam together with the Ministry of Environmental and Natural Resources and partners organized the “Kicked-off Conference - National Action Plan on Circular Economy”. This emphasized cross-segment collaborations among public, private, and educational sectors toward the net-zero goal by 2025.
Aligning with ESG strategies, a global-scale ESG Symposium 2022 was organized on July 19th with profound discussions on future ESG for net-zero goals. Experts from various industries such as ASEAN Secretary-General, Microsoft, and Blackrock attended the event. Stemming from the event, an activity to empower young generations’ ESG practices, the “Hacks to Heal our Planet: ESG Idea Pitch” competition, gathered fresh ideas from regional participants who address global and local issues. Furthermore, SCG also conducted the ESG camping for talents from SCG Sharing the Dream scholarship. Additionally, to enhance children’s educational opportunities, SCG organized activities on International Children’s Day and engaged environment enthusiasts on Recycling Day at Ba Ria-Vung Tau School for Disabled Children.
Mr. Roongrote further elaborates that “at present, the global economy is highly unpredictable. SCG closely monitors the situation and aligns its operations with 5 strategies consisting of 1.) reducing costs and increasing alternative energy, 2.) continuously developing High Value Added Products & Services (HVA), 3.) expanding financial liquidity, 4.) prudent strategic investments; and 5.) emphasizing ESG with ESG 4 Plus guidelines:
1.) Reducing costs and increasing alternative energy by adopting efficient manufacturing technologies, reducing waste, and increasing the proportion of alternative energy such as biomass and solar power. At present, SCG’s alternative energy consumption stands at 16.4%.
2.) Continuously developing High Value Added Products & Services (HVA) while seeking new markets to create distinctiveness and increase competitiveness. Examples of chemical innovations include high-quality odorless PCR for eco-friendly packaging, especially those that require fragrance, and barrier coating technology that substitutes multi-material packaging with mono-material to ease the recycling process. Examples of better living innovations are SCG HVAC Air Scrubber, an air treatment system that reduces cooling load in buildings and saves 20-30% on electricity expenses, antibacterial tiles, touchless faucets and sanitary wares, and Ultraclean+ coated sanitary wares by COTTO Health & Clean that help curb bacterial accumulation. Examples of construction innovations under the CPAC Green Solution brand use technology to enhance construction solutions such as farm solution, a one-stop farm design and construction service with quick completion and bio-security standards, as well as gas station solution, a one-stop gas station design and construction service. An example of packaging innovation is Fest Chill food packaging from paper, coated with peelable films for convenience in recycling and degradable with durable designs suited for food delivery services.
3.) Expanding financial liquidity with proper working capital management, inventory level that reflect market demand, and trade credits that are closely monitored. Additionally, SCGP digital bonds are to be issued on August 1, 2022.
4.) Prudent strategic investments, revisiting investment plans, delaying new, unurgent projects or those that require longer runway to generate returns, and targeting quick-return projects that are aligned with SCG’s growth strategy. Examples are the Long Son Petrochemicals Company Limited (LSP) in Vietnam which is progressing as planned with 96% completion and is expected to begin commercial operations by H1/2023. Recently, SCGP expanded into the packaging materials recycling business with Peute Recycling B.V., Netherlands’ largest packaging materials recycler, and invested in USA’s Imprint Energy Inc. in the printed battery business. Imprint has solid growth potential while its know-how and expertise can be applied in ASEAN and used for smart packaging.
5.) Emphasizing ESG with ESG 4 Plus guidelines (Set net-zero – Go green – Reduce inequality – Embrace collaboration, PLUS trust through transparency in all operations). In H1/2022, sales of eco-friendly innovations under the SCG Green Choice label amounted to 104.1 Trillion VND ( $USD 4.5 Billion), 50% of the total Revenue from Sales.
SCG focuses on reducing inequality for those affected by the economic crisis. In H1/2022, the projects welcomed 4,366 participants in all 3 facets addressed. Firstly, creating sustainable income such as knowledge development to add value to community products, career development for the disabled, home renovation skills development, and in-demand skills development for young generations. Secondly, enhancing skills for job stability such as for contractors. And expanding work opportunities such as allowing credits for contractors to facilitate the purchasing of construction materials by Siam Saison.
Recently, SCG organized the ESG Symposium 2022 which welcomed over 130,000 on-site and online participants and collaborations from 315 coalitions across sectors to relieve the earth’s crises and reduce inequality. The event expanded brainstormed ideas to implementation with guidelines to establish collaborations for innovation towards net-zero. This contributes to timely development of a roadmap for the best carbon emissions reduction innovation for use in Thailand. Also, plans were underway for collaborations toward a low-carbon society with 60 private organizations that extend across alternative energy, circular economy, sustainable consumption, and enhancing women and youth’s roles in driving the economy and resolving crises together.
Besides, SCG collaborated with the Thai Cement Manufacturers Association (TCMA), Thailand Concrete Association (TCA), and Global Cement and Concrete Association (GCCA) to establish the “Thailand Chapter: Net Zero Cement & Concrete Roadmap” which was presented at the GCCA CEO Gathering 2022 in Atlanta, USA. This was done to help drive CO2 emission reductions in cement and concrete businesses worldwide.
