Bangkok: 24 January 2018 – SCG’s 2017 Operating Results are satisfactory, thanks to the company’s strategy of being promptly adaptable to changes in the market and consumer needs, as it prepares to continue to expand its service business. Despite risks such as costs of raw materials and energy, the strengthening Thai Baht, and regional competition coming in this year, the company focuses on strategy of collaborations with digital startups and equipping employees to be adaptable to change, as well as an expansion of its service and logistics business, will help SCG to stay competitive. Meanwhile, its investments in ASEAN are progressing according to plan.
Mr. Roongrote Rangsiyopash, President and CEO of SCG, disclosed the company’s unaudited Operating Results for FY2017, with registered Revenue from Sales increase 6% y-o-y to 300,614 Billion VND (US$ 13,286 Million) from higher chemicals prices, while Profit for the Period reached 36,694 Billion VND (US$ 1,622 Million), a decrease of 2% y-o-y, mainly from strong competition in Cement–Building Materials business.
On a quarterly basis, SCG’s Q4/2017 Revenue from Sales increased 14% y-o-y to 75,600 Billion VND (US$ 3,442 Million), mainly due to higher chemicals product prices and slightly increased 1% q-o-q. Profit for the Period reached 8,378 Billion VND (US$ 381 Million), an increase of 1% y-o-y and 6% q-o-q.
In ASEAN (ex-Thailand), SCG’s Q4/2017 Revenue from Sales recorded 17% growth y-o-y, amounted to 18,435 Billion VND (US$ 839 Million), which is 24% of SCG’s total Revenue from Sales. The Revenue from Sales in 2017 recorded 9% growth y-o-y, amounted to 71,065 Billion VND (US$ 3,141 Million).
As of 31 December 2017, total assets of SCG amounted to 409,580 Billion VND (US$ 17,558 Million), while the total assets of SCG in ASEAN amounted to 99,868 Billion VND (US$ 4,281 Million), which is 24% of SCG’s total consolidated assets.
In the Vietnamese market, SCG’s Q4/2017 Revenue from Sales amounted to 6,518 Billion VND (US$ 297 Million), which includes sales from both operation in the country and imports from the Thai operations. This represents an increase of 25% y-o-y mainly from packaging paper and building materials products. The 2017 Revenue from Sales recorded 25,703 Billion VND (US$ 1,136 Million).
For the latest movement in Vietnam, SCG granted scholarships to 114 excellent ex-scholars who had been successfully enrolled in the universities as freshmen in business and engineer faculty under the SCG Sharing the Dream Scholarship program. Moreover, SCG officially handed over a SCG Sharing the Dream Playground which customized for Long Son 2 Primary School in Long Son Commune, Ba Ria Vung Tau province where is the location of SCG’s flagship project Long Son Petrochemical Complex.
In the building material market, the construction is still continuing growth aligning with Vietnam economic, especially in the sector of housing project and single house. Moreover, Vietnamese customers need good quality of building materials to fulfil their home. Recently, SCG Concrete Roof Vietnam – a subsidiary of SCG, received an excellent award as Vietnam’s Top 20 Trademark, and its product ‘Elabana’ Profile was selected as Vietnam’s Top 10 Golden Product in 2017. These activities manifested SCG’s relentless effort throughout the years to continue improving the product quality and promote better living standard to answer the needs of Vietnamese consumers.
In the packaging business, the demand of packaging also continuously increased aligning to Vietnam economic and a higher consumption, which benefits SCG’s packaging business in the country. Mr. Roongrote said “SCG’s 2017 Operating Results are considered to be satisfactory, despite heightened competition in both domestic and region, rising costs of raw materials and strengthening Thai Baht which affected the business. Thanks to increasing chemicals prices, the company’s ability to adapt to changes in several aspects, and an expansion of the services and solutions business such as logistics that serves the needs of customers precisely and in a timely manner, SCG has successfully maintained its standards of business operations while also serving customers more efficiently. However, 2018 brings certain risks such as rising costs of raw materials for chemicals and packaging, higher energy costs, strengthening Thai Baht, as well as an intense competition in the region especially for the cement industry. To mitigate and prepare for these risks, SCG will continue to expand its services and solutions business, and utilize automation and robotics technology to help maximize business efficiency. In addition, the company has established the Reskill Training Program to develop our employees’ capabilities so that they are able to navigate the changes and serve the needs of customers as well as expand the business internationally in the future.”
SCG has also invested in startups that focus on digital and logistics businesses to allow customers to have access to SCG Logistics’ delivery trucks via a digital platform, offering a more convenient and faster service. There are more than 7,000 trucks throughout the ASEAN region.
In addition, SCG also continues to focus on High Value Added products and services to quickly respond to the needs of consumers. In the past year, the company has invested more than 2,785 Billion VND (US$ 123 Million) in research and innovation, accounting for approximately 0.9% of its total Revenue from Sales. Sales of HVA products in 2017 totaled 117,027 Billion VND (US$ 5,172 Million), approximately 39% of the total Revenue from Sales.
Meanwhile, collaborations with digital startups are progressing well, with more than 40 ongoing projects with potential for commercialization. The company also sees business opportunities to connect with startup networks in the USA, Israel, and China.
The cement and building materials businesses in ASEAN are progressing as planned, serving rising demands in the regional market. Currently SCG operates cement plants in six countries, with a total production capacity of 33.6 million tons per year, including the operations in Thailand.
“SCG has also acquired a 68.3% stake in Interpress Printers, a leading manufacturer of fast food packaging in Malaysia with the market cap of 104.5 million Malaysian ringgit or approximately 836 million Baht. The acquisition will benefit SCG’s development of fast food packaging for the fast growing consumer demands in ASEAN,” said Mr. Roongrote.
SCG, one of the leading conglomerates in the ASEAN region, comprises three core businesses: SCG Cement-Building Materials, SCG Chemicals, and SCG Packaging. With more than 200 companies under its umbrella and approximately 57,000 employees, SCG creates and distributes innovative products and services that respond to the current and future needs of consumers.
SCG began its business operations in Vietnam since 1992 with trading business and gradually expanded investment in diversified businesses in the cement-building materials, chemicals, and packaging industries.
Today, with total of 21 companies across Vietnam driven by approximately 8,300 employees, SCG offers variety of premium products and services to markets. Available products in cement-building materials include, concrete roof, fiber cement board, fiber-cement wood substitute products for floor and ceiling, white cement, ready-mixed concrete under the brand ‘SCG’ and wall and floor ceramic tiles under the brand ‘COTTO & Prime’ and sanitary ware & fittings, bathroom fixtures under the brand ‘COTTO’. In the packaging business, available products are reading & writing paper under the brand ‘IDEA’ and corrugated containers, kraft paper and flexible packaging. In the chemicals business, available products are downstream chemicals products such as PE&PP, XLPE, PVC resin and compound, etc. Besides, SCG also has a building materials showroom in Hanoi to welcome customers to experience SCG products and services.