Bangkok--25 Apr--SCG
ASEAN business restructuring, ceramics acquisition in Vietnam, and continued movements towards becoming an ASEAN sustainable leader
SCG announces the operating performance for the first quarter of fiscal year 2013 showing higher profit and sales from growths in all business units with continued growths in all businesses.
The company recently undertook a strategic business restructuring whereby the cement, building materials and distribution were consolidated into one business unit and is referred to as “SCG Cement-Building Materials.” This business restructuring and SCG’s latest investment in Vietnam, the acquisition of a 85% stake in Prime Group, have marked significant steps for SCG to drive its business expansion in ASEAN.
Mr. Kan Trakulhoon, President & CEO of SCG, disclosed the unreviewed consolidated financial statements of SCG and its subsidiaries for Q1/2013, which showed Profit for the Period of 8,796 MB, an increase of 47% y-o-y. This is attributed to the growths in all business units, and resumption of equity income from associates. Revenue from Sales increased 6% y-o-y to 109,439 MB on higher sales volume in the paper and cement-building materials businesses.
On a q-o-q basis, Profit for the Period increased 27% q-o-q, benefitting from the seasonal volume growths in the cement-building materials business, and the recovery of chemicals margins. Revenue from Sales increased 10% q-o-q.
As for SCG business in ASEAN market outside Thailand, the Revenue from Sales in Q1/2013 amounted to 8,280 MB, an increase of 36% from the same period of last year, and also amounts to 8% of SCG’s total Revenue from Sales.
Total assets of SCG in ASEAN as of March 31, 2013 amounted to 53,634 MB, which is 13% of total assets of SCG.
The total assets of SCG as of 31 March 2013 amounted to 407,940 MB.
The operating results of SCG’s major businesses for Q1/2013 were as follows:
SCG Chemicals: In Q1/2013, SCG Chemicals reported Revenue from Sales of 53,478 MB, an increase of 1% y-o-y, attributed to higher sales volume as well as product prices. Profit for the Period amounted to 2,629 MB, an increase of 112% y-o-y.
SCG Paper: In Q1/2013, SCG Paper reported Revenue from Sales of 15,074 MB, an increase of 8% y-o-y, attributed to seasonally strong demand in both the Packaging and the Fibrous (Printing & Writing) chains. Profit for the Period amounted to 1,342 MB, an increase of 33% y-o-y.
SCG Cement-Building Materials: in Q1/2013, SCG Cement-Building Materials reported Revenue from Sales of 43,237 MB, an increase of 14% y-o-y from volume growth of both cement and other building materials products, in addition to the consolidation of the RMC operations in Indonesia. Profit for the Period registered 4,042 MB, an increase of 6% y-o-y.
Mr. Kan said, “Recently, SCG announced a strategic business restructuring, whereby the cement, building materials and distribution business units were consolidated into a single market-facing entity, and is referred to as “SCG Cement-Building Materials.” The restructuring is aimed to further strengthen SCG’s operational excellence and is the offensive strategy moving towards sustainable leader in ASEAN. This will increase our capability to develop products and services, support the improvements in technology requirements and development of the High Value Added (HVA) products and services, fulfill customer needs quickly and efficiently, and lead business to sustainable growth in long term. SCG will invest more in cement-building materials business as we foresee market potential growth in the future. Last year, the sales of this business amounted to 154,537 MB, which is 36% of total consolidated revenue from sales of SCG, and the profit of this business amounted to 13,129 MB, which is half of total consolidated profit for the year of SCG. This business is expected to be more than 40% of total consolidated revenue from sales of SCG in the next five years.”
“Moreover, SCG continues to enhance its capabilities and offerings within ASEAN, towards the leader of construction materials market in the region, and follow the vision of becoming an ASEAN sustainable business leader by owning 85% stake in Prime Group Joint Stock Company (Prime Group), Vietnam’s leading building materials manufacturer that is valued at 7,200 million baht. This latest investment has propelled SCG to become the world’s largest ceramic tiles producer with highest production capacity of 225 million ceramic square meters, combined with productions in ASEAN countries including 48% in Thailand, 33% in Vietnam, 14% in Indonesia, and 5% in the Philippines.” Mr. Kan said.
SCG’s strategy to become an ASEAN sustainable business leader remains focused on the development of High Value-Added (HVA) products and services. The Board of Director has approved the investment project of 2,475 MB to enhance quality of product and increase LDPE production capacity of Thai Polyethylene Co.,Ltd in SCG Chemicals. With this investment, the company will increase capacity for another 60,000 tons per year, which has made total capacity to 152,000 tons per year. The LDPE, which is product for high quality lamination packaging industry, has potential growth in the market. The company will start up the production in 2016.
In Q1/2013, HVA products sales amounted to 37,504 MB, the equivalent to 34% of SCG’s total sales. Furthermore, SCG’s sales of “SCG eco value” products amounted to 22,668 MB, the equivalent to 21% of SCG’s total sales, an increased from the 14% achieved in 2012. These are the results of the SCG’s corporate policy to drive towards becoming an innovative organization.