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Message from the Board of Directors

In 2022, the world was beset by compounding crises triggered by the Russia-Ukraine conflict, precipitating escalating energy prices which spiked to their highest levels in decades, exacerbating impact from the trough of petrochemical industry that reached its lowest point in 20 years. Central banks raised interest rates historic high to combat elevated inflation. Such adversities were compounded by China’s strict zero-COVID policy, slowing the global economy. These incidents had far-reaching consequences on the quality of life and business like never before.

SCG swiftly adapted and mitigated the repercussions on the overall business, taking multiple initiatives such as maintaining financial stability, strictly managing liquidity, reducing costs, and making prudent investment decisions. This ran parallel with entering into new businesses and taking on new opportunities arising from the economic recovery in areas such as clean energy, green innovations, health and medical solutions, and Smart Living Solution to elevate the quality of life, enabling people to live a more convenient, cost-effective, safe, and environmentally friendly life.

As at year end 2022, SCG manifested a strong financial position. The Company’s operating results registered revenue from sales of 569,609 Million Baht, an increase of 7% from the previous year. Profit for the year amounted to 21,382 Million Baht, down 55% from the preceding year due largely to repercussions from slow economic growth, the trough of the petrochemicals industry that reached its lowest point in 20 years, and soaring energy costs. In 2022 SCG’s revenue from sales of High Value Added (HVA) Products & Services totaled 195,520 Million Baht, representing 34% of total revenue from sales. Net debt to Equity ratio stood at 0.6 times while cash flows were stable. As a result, the Board of Directors resolved to propose at the 2023 Annual General Meeting of Shareholders a full year dividend payment of 9,600 Million Baht, or 8.0 Baht per share, representing a payout rate of 45% of profit for the year according to the consolidated financial statements. This comprised an interim dividend of 6.0 Baht per share, and a final year-end dividend of 2.0 Baht per share.

  Maintaining Financial Stability with a Robust Cash Flow of 95,000 Million Baht  

Amid the compounding crises, SCG placed strong emphasis on risk management, liquidity management, effective and resilient inventory management in response to the market demand and making prudent strategic investment decisions in nearly completed projects with short lead time to cashflows whilst delaying lower priority investments. The efforts resulted in a robust cash flows of 95,000 Million Baht as at year end 2022.


  Reducing Costs, Accelerating Production Efficiency  

In the wake of surging energy prices, SCG strived to reduce costs by every possible means, enchance production efficiency, and increase clean energy use. In 2022, SCG achieved a 34% use of alternative fuel for domestic cement operations. Another key contributing initiative was the development of multiple digital technologies for the production process to enhance competitiveness, for example, the Digital Twin and Advanced Process Control simulation technologies, AI robots, and automation machines. On the other end, SCG collaborated across the supply chain of ceramic businesses in four countries, namely, Thailand, Vietnam, Indonesia, and the Philippines to ensure effective multi-plant production rationalization along with developing production technology and innovative products with high value add.


  Advancing into the Energy Transition Solutions Business, and Striving to Achieve Net Zero Target  

SCG has advanced into the integrated energy transition solutions business, delivering solar energy for residential market, factories, industrial estates, hotels, shopping malls, and hospitals through its Smart Grid technology. In 2022 SCG has solar capacity of 234 megawatts both for internal and external, uses an increase of 78% from the previous year. In addition to investing in heat battery technology (thermal energy storage) that stores solar energy for use when there is no sunlight, SCG is determined to develop high quality biomass and biocoal from agricultural waste and Refused Derived Fuel (RDF) as alternative energy.


  Accelerating Development of green solutions to Address Eco-Friendly Trends  

In response to consumers’ Preference shift towards more sustainable products and services, SCG has accelerated the development of green solutions that enable consumers to live a more convenient life and become more ecoconscious. For example, eco-friendly polymer, which has gained wide acceptance in the global marketplace, recorded sales of 140,000 tons last year, a growth of 5 times, compostable packaging, and CPAC Green Solution construction technology such as the 3D Printing Solution helped speed up construction and reduce labor costs.


  Staying Safe and Healthy with Health and Medical Innovations  

COVID-19 has made more people concerned about their health. In response, SCG has expanded the Smart Living Solution business that helps elevate health safety. The business introduced SCG Bi-ion air disinfection system and SCG Air Scrubber, an energy-saving air purifier. SCG has also developed DoCare, a health and safety monitoring solution that connects homes and hospitals, enabling real-time health monitoring. SCGC has developed plastic resin for medical equipment such as syringes, IV bags and tubes. At the same time, SCGP extended its reach into the medical supplies and labware by partnering with Deltalab of Spain to produce over 150,000 SKUs of products for global distribution.


  Expanding into ASEAN and Global Markets, Taking New Opportunities Arising from the Economic Recovery  

As the economy has shown signs of recovery with sustained growth, SCG has taken bold moves to expand investment in high potential and sustainable projects into ASEAN and global markets. Examples are Long Son Petrochemicals Company Limited (LSP), an integrated petrochemicals complex in Vietnam scheduled to commence commercial production in 2023, adding to the Company’s petrochemicals capacity by 40% from 6.9 million to 9.8 million tons per annum. Also, SCGC teamed up with Sirplaste company in Portugal to expand the capacity of high quality post-consumer plastic resins aimed to supply to the European and African markets. SCGC also entered into plastic waste recycling business in collaboration with Recycling Holding Volendam B.V. (Kras), a leading waste recycling business in the Netherlands, managing plastic waste to the production of recycled plastic, as well as signed a joint venture agreement with Denka Company Limited in Japan to produce acetylene black, a component for the manufacture of lithium-ion batteries for electric vehicles (EV).

Additionally, SCG plans to take new opportunities arising from economic rebound by providing a complete range of services in logistics and supply chain through SCG JWD Logistics Public Company Limited (SCGJWD). The merged company between SCG Logistics and JWD Info Logistics, which has become ASEAN’s largest integrated logistics and supply chain service provider, offers services for goods that demand special care in all industries, for example, vaccines, expensive artworks, cars, and frozen food with an extensive network across ASEAN and China.

To expand the packaging material recycling business in response to the eco-friendly trends, SCGP acquired stakes in Peute Recycling B.V. (Peute) in the Netherlands and Jordan Trading Inc. (Jordan) in the United States.


  Embracing ESG to Drive the World toward Sustainability  

SCG pledges to grow businesses in alignment with the ESG 4Plus strategy, encompassing “Set Net Zero, Go Green, Reduce Inequality, and Embrace Collaboration” plus trust through transparency in all operations. The Company takes aim at realizing the Net Zero Target by 2050. In 2022, SCG achieved a reduction of 4.13 million tons in green-house gas emissions through the use of alternative energy, tree planting, and cooperation with multiple networks to construct 115,000 check dams to restore watershed forests. In pursuit of reducing social inequality, SCG focused on promoting skill development initiatives to create careers and generate income for communities and collaborating with a consortium of partners to combat climate emergency and reduce inequality at ESG Symposium 2022.


  From the Royal Intuition to an Innovative Organization for Sustainability  

Throughout the course of 110 years, SCG has grown sustainably alongside the nation’s economic and social advancement. To honor His Majesty as well as commemorate the King’s royal grace in decreeing the establishment of Siam Cement Co., Ltd., SCG has obtained a royal permission to build a statue of His Majesty King Vajiravudh as a memorial representing the gratitude of SCG employees toward His Majesty. Their Majesties the King and Queen subsequently presided over the unveiling ceremony of the statue of His Majesty King Vajiravudh (King Rama VI) at SCG’s Head Office on March 20, 2022.


The Board of Directors would like to express its sincere gratitude to all shareholders, debenture holders, joint venture partners, suppliers, contractors, customers, and all other relevant parties including domestic and international financial institutions for their continued support toward SCG. This gratitude also extends to all SCG employees for their agility and dedication that have enabled SCG to create innovations and solutions that satisfied customer demand. All relevant parties can be rest assured that SCG will be able to weather the crisis and grow the business robustly while taking care of society and the environment with adherence to transparency in alignment with the ESG approach. The Company is keen to partner with all sectors to pass on a better and more sustainable world to the next generations to come.

Bangkok, January 25, 2023

Air Chief Marshal Satitpong Sukvimol
Roongrote Rangsiyopash
President & CEO