SCG has declared a long-term growth strategy based on ESG (Environmental, Social, and Governance) and plans to manage raw material and fuel cost, increase the proportion of renewable energy in biomass and solar, and prepare for the likelihood of higher inflation. Following the country's reopening, it predicts a brisk market and global economic recovery. SCG stands ready to seize opportunities by introducing green and wellness products such as SCG Green Choice and CPAC Green Solution. Additionally, it will swiftly enter the market of manufacturing raw materials for bioplastics. SCG aims to support the society by assisting in vaccine distribution to Southern Thailand via cold-chain logistics, in addition to resolving floods and creating jobs.
Mr. Roongrote Rangsiyopash, President and CEO of SCG, disclosed, “The Company’s unreviewed Operating Results for Q3/2021 registered the Revenue from Sales of 94,161 billion VND (US$ 4,004 million), a drop of 1% q-o-q, Normalized Profit for the Period stood at 6,476 billion VND (US$ 275 million), a decrease of 47%q-o-q on lower chemicals product spreads and equity income. Meanwhile, Profit for the Period including asset impairment of cement plant in Myanmar and gain from fair value adjustment of investment totaled 4,737 billion VND (US$ 207 million), down 60% q-o-q.
Compared to the previous year's performance, Revenue from Sales increased 31% thanks to the rising chemical product prices while Normalized Profit for the Period fell by 11% due mainly to the new wave of COVID-19 pandemic and regional lockdown which affected the Cement-Building Materials Business. Profit for the Period including asset impairment and gain from adjustment of investment dropped 30%.
In 9 months of 2021, SCG registered Revenue from Sales of 282,601 billion VND (US$ 12,294 million), a rise of 28% y-o-y. Profit for the Period totaled 27,762 billion VND (US$ 1,232 million) up 49% y-o-y, as a result of improved chemicals product spreads and equity income.
SCG’s Revenue from Sales of High Value-Added Products & Services (HVA) for 9 months of 2021 amounted to 95,360 billion VND (US$ 4,233 million) or 34% of total Revenue from Sales. Furthermore, New Product Development (NPD) and service solutions contributed 15% and 5% of total Revenue from Sales respectively.
SCG's Revenue from operations outside of Thailand together with export sales from Thailand in 9 months of 2021 registered 116,325 billion VND (US$ 5,532 million) or 45% of total Revenue from Sales, up 35% compared to last year.
SCG in ASEAN (ex-Thailand)
For SCG’s operation in ASEAN (ex-Thailand), the Revenue from Sales in Q3/2021 recorded a 32% increase y-o-y, amounting to 23,163 billion VND (US$ 1,012 million), and 25% 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 September 2021, the total assets of SCG amounted to 570,315 billion VND (US$ 25,086 million), while the total assets of SCG in ASEAN (ex-Thailand) were 249,654 billion VND (US$ 10,981 million), 44% of SCG’s total consolidated assets.
To fulfill the needs of customers and the megatrends of the Thai and ASEAN economies. SCGP has implemented a number of technologies to assist with operations, including mechanization, automation, and artificial intelligence (AI) to assess, predict, improve production efficiency, and improve product quality to the industries.
In Q3/2021, SCG’s total asset in Vietnam was 135,951 billion VND (US$ 5,980 million), an increase of 57% y-o-y mainly from the Chemicals Business (LSP).The company reported Q3/2021 Revenue from Sales at 6,894 billion VND (US$ 301 million), a 4% increase y-o-y mainly from export sales from Thailand to Vietnam.
In Vietnam, during the surge of the pandemic, SCG continued to extend resources and support to the government and the communities in hot-spot areas including Ho Chi Minh City, Dong Nai, Binh Duong, Long An, Quang Binh, Ba Ria Vung Tau, and Ha Noi. At present, SCG has donated approximately 4,000 paper field hospital beds, 53 modular bathrooms, real-time PCR test kits, and medical equipment, all of which, amounting to over 30 billion VND. Additionally, funding of 10.60 billion VND was donated to the government to be allocated for vaccine procurement purposes. During the period, SCG’s subsidiaries strictly complied with the safety measures instructed by the government. This included the “3-on-site” measures, which required companies to facilitate employees to work and reside in a single location, isolated from the surrounding communities. This helped to support business continuity and protected lives in the community.
Moreover, in contributing to the advancement of Vietnam’s packaging industry, SCGP, SCG’s packaging business, organized the 1st SCGP Packaging Design Challenge which welcome hundreds of young designers and talents.
Mr. Roongrote said, “SCG’s financial position remains strong despite a dip in profits as a result of regional lockdown, higher fuel, and raw material costs. SCG has strengthened its ESG (Environmental, Social, and Governance) requirements to prepare for potentially higher fuel and raw material costs and strong inflation, which is projected in the future. To address this challenge, SCG has accelerated risk management by signing future fuel contracts, selecting raw materials appropriate for market conditions, and increasing the proportion of alternative energy. In the first eight months of 2021, the proportion of biomass usage from agricultural waste and RDF was 12% (Cement-Building Business’ biomass and RDF use was up to 25%) and solar energy accounted for 3% or 77,744 megawatt-hours.
However, it is expected that after the country's reopening, purchasing power would return as businesses and consumers adapt to living with COVID-19, as in many other countries, which is a healthy sign of global and domestic economic recovery. SCG is preparing to seize opportunities for long-term growth through green and wellness products such as SCG Green Choice, which reduces the use of natural resources while saving energy and promoting good hygiene, and CPAC Green Solution, which uses digital technology to increase construction speed, reduce dust pollution, and cut construction waste. Furthermore, it continues to invest in environmentally friendly businesses, such as the production of bioplastics.
SCG Chemicals aspires to be a "Chemicals Business for Sustainability" by implementing energy-saving projects and speeding the expansion of its circular economy business. It recently signed a MOU with Braskem to explore the feasibility of entering into joint ventures to build a bio-ethylene plant in Thailand to address the demand for bioplastics. In terms of the progress of the share acquisition of Sirplaste, Portugal's leading plastic recycler, the shares are expected to be transferred by the end of the year.
Meanwhile, the advanced recycling demonstration plant has been certified "ISCC PLUS" by International Sustainability and Carbon Certification (ISCC). Additionally, RIL Industrial Estate under SCG Chemicals has been certified Eco-World Class, the top tier certification by the Industrial Estate Authority of Thailand (IEAT) for three years in a row, making it the first in Thailand to sustain these continued achievements.
Long Son Petrochemicals Company Limited (LSP) in Vietnam has completed 87% of its planned progress and will begin commercial operations in the first half of 2023.
Cement-Building Materials Business aims to secure more renewable energy by acquiring agricultural waste to use as fuel, recycling waste heat generated from cement manufacturing process, and boosting the use of solar power from solar farm and solar floating solutions.
SCGP strives to develop a diverse range of packaging innovations to fulfill the needs of customers and the megatrends of the Thai and ASEAN economies. SCGP has implemented a number of technologies to assist with operations, including mechanization, automation, and artificial intelligence (AI) to assess, predict, improve production efficiency, and improve product quality to the industries. SCGP also works on packaging innovation that may be reintroduced into the recycling process and increasing the share of renewable energy in the manufacturing process. Meanwhile, it will continue to expand its company through organic and inorganic expansion (Merger & Partnership) to become ASEAN's integrated packaging solutions provider and meet the growing need for consumer packaging.
