SCG Packaging Public Company Limited (SCGP) posted a 22% increase in net profit in nine months of this year, driven largely by the strong demand in the consumer products segment, robust business model, expanding operations by means of merger and partnership arrangements in ASEAN.
The large and diverse customer base has also contributed to the 4,971 million baht in net profit made in the January-September period. The company's total revenue in the period rose 5% to 69,190 million baht compared to the same
period last year.
Wichan Jitpukdee, Chief Executive Officer, SCGP, said the growth achieved by the company is noteworthy from the perspective of the grave economic downturn. SCGP has significantly benefitted from its key clients in the consumer products segment which constitutes about 70% of Integrated Packaging Chain's sales and showed a continued increase in the demand. The company has had a large customer base in various industries which help spreading risks, according to Mr.Wichan.
The segments which recorded a robust growth in SCGP?s offerings in the nine-month period were the packaging for consumer products, E-commerce and food delivery. Demand from the consumer electronics industry, which slacked earlier due to slowdown in consumers' purchasing power, has begun to pick up in the third quarter of this year.
Meanwhile, the packaging demand in Vietnam, one of SCGP's regional markets, has rebounded after the adverse effect of COVID-19 pandemic has eased. SCGP's business expansion both in Thailand and ASEAN, especially the merger of paper packaging operations in Indonesia and performance and polymer packaging works in Thailand, have resulted in higher revenue and profit for the company.
SCGP has adopted a robust business model which offers a wide range of products and services. Its production capabilities encompass upstream and downstream packaging products which allow the company to meet the specific needs of each customer efficiently.
SCGP also focuses on expanding the market for packaging of consumer products whose demand has continued to rise in any economic conditions given that these consumer goods are essential in a daily life. The business continuity plan and prudent cash flow management have enabled SCGP to grow and cope with the economic fallout from the coronavirus outbreak in the past.
"The performance we achieved in the wake of economic downturn manifests that we are on the right course forward with a quality growth," Mr.Wichan noted.
Following the successful listing on the Stock Exchange of Thailand, SCGP is moving forward with the expanding investment in the ASEAN region to maintain its leadership in integrated packaging in this region, he added.
Meanwhile, SCGP's additional production capacity of flexible packaging in Vietnam has started operation. The construction of SCGP's three other projects worth more than 7.7 billion baht are well underway and due to come on stream next year. These are the schemes to expand the production of packaging paper in Indonesia and the Philippines, and a project to boost output of the flexible packaging in Thailand.
In another development, SCGP?s acquisition of a majority stake in Bien Hoa Packaging Joint Stock Company (SOVI), one of Vietnam's largest producers of corrugated containers and a company listed on the Ho Chi Minh Stock Exchange, is expected to be completed in December of this year. Currently, SCGP is finalizing the inventory inspection process.
This investment will boost SCGP's production capacity of downstream packaging from pulp and paper in Vietnam. It also increases the potential to expand the packaging market in the republic, thanks to SOVI's customer base which mostly comprises large multinational and leading companies in the consumer products business.
"This particular acquisition is in accordance with the company's strategy to expand investment in the ASEAN region, consolidating the customer base in the consumer product sector and enhancing downstream packaging production capability to strengthen our position as a leader in the integrated packaging industry in ASEAN," concluded Mr.Wichan.