Press Release      

SCG ANNOUNCES STRONG OPERATING RESULTS DESPITE COVID-19, ATTRIBUTABLE TO EMPLOYEE’S DEDICATION,

ACTIVE APPROACH, AGILITY AND USE OF DIGITAL TECHNOLOGY TO FULFILL MARKET NEEDS

Bangkok: 28 January 2021—SCG recorded higher profits in 2020 than last year despite the COVID-19 crisis’s constraints. The success was driven by the dedication of all SCG employees who rigorously complied with strict COVID-19 measures combined with operational agility and the use of digital technology to explore new opportunities in delivering innovations, products, services, and solutions amid challenging market circumstances. These efforts enabled the continuity of SCG’s business operations. Meanwhile, SCG has provided assistance in particular to areas with high infection rates to help them get through the crisis and return to sustainable growth.

Mr. Roongrote Rangsiyopash, President and CEO of SCG,  disclosed the company’s unaudited Operating Results for FY2020, with Revenue from Sales decreasing 9% y-o-y to 148,674 Billion VND (US$ 9,602 Million), largely from lower chemical prices and sale volumes. Profit for the year registered at 26,265 Billion VND (US$ 1,091 Million), an increase of 7% y-o-y from better performance in all businesses. In 2020, SCG’s Revenue from Sales of High Value Added (HVA) Products & Services reached 97,012 Billion VND (US$ 4,030 Million), representing 32% of total Revenue from Sales which improved from the previous quarter.

SCG’s Revenue from Sales in Q4/2020 decreased 4% q-o-q to 74,808 Billion VND (US$ 3,222 Million), from seasonally weak demand at Cement-Building Materials business (CBM), effect of COVID-19, and Chemicals business had a planned of Map Ta Phut Olefins (MOC) turnaround in Q4/20. While the turnaround was completed sooner than planned which helped offset some production loss, it nevertheless contributed to lower-than-normal chemicals sales volume in Q4/20. Meanwhile, revenue from sales dropped 8% y-o-y, mainly due to lower sales volume of Chemicals business stemming from MOC turnaround and lower sales in Cement-Building Materials business due to the effect of COVID-19 pandemic on the economy.

Profit for the Period registered at 6,191 Billion VND (US$ 263 Million), in Q4/20, a decrease of 17% q-o-q due to lower Cement-Building Materials (CBM) performance resulting from continued economic slowdown due to COVID-19, heavy rainfall and floods in the region, and recognition of CBM’s asset impairments in Q4/20 from Myanmar and Indonesia cement operations. Meanwhile, quarterly profit increased 13% y-o-y from better chemicals earnings, mainly driven by lower feedstock costs.

Besides, SCG’s Revenue from businesses outside of Thailand together with export sales from Thailand registered 129,784 Billion VND (US$ 5,391 Million), in 2020, or 42% of total Revenue from Sales, higher compared to 41% in the previous year.

SCG in ASEAN (ex-Thailand)

For SCG’s operation in ASEAN (ex – Thailand), the Revenue from Sales in 2020 recorded 11% decrease y-o-y, amount to 19,405 Billion VND (US$ 838 Million), which is 26% of SCG’s total Revenue from Sales. This includes sales from both local operations in each ASEAN market and imports from Thai operations.

As of 31 December 2020, total assets as of SCG amounted to 576,952 Billion VND (US$ 24,970 Million), while the total asset of SCG in ASEAN (Ex-Thailand) amount to 218,374 Billion VND (US$ 9,451 Million) which is 38% of SCG’s total consolidated assets. Based on the Q4/2020 report, SCG in Vietnam owned 111,044 Billion VND (US$ 4,806 Million) worth of total asset, an increase of 50% y-o-y mainly from Chemicals Business. The company reported Q4/2020 Revenue from Sales at 6,855 Billion VND (US$ 296 Million) which includes sales from both operations in the country and imports from the Thai operations, this represents a decrease of 3% y-o-y. For 2020, SCG’s Vietnamese market reported Revenue from Sales of 26,574 Billion VND (US$ 1,144 Million), which is a 10% decrease y-o-y mainly from Operation of Cement-Building Materials business and Export from Thailand.

SCG Vietnam adheres to conducting socially responsible business and community and social development and fosters sustainable growth in all regions and communities where we operate. As a result, SCG Vietnam gained significant business achievements. SCG Concrete Roof Vietnam ranked amongst the Top 100 Sustainable Companies in Vietnam ranked by the Vietnam Business Council for Sustainability (VBCSD). Besides, PRIME Group, the country’s leading tile producer, is recognized as the ASEAN Outstanding Enterprises 2020 Vietnam Award for the positive contribution to national and regional development. The Long Son Petrochemicals Project (LSP)’s construction progress, Vietnam’s first fully integrated petrochemicals complex, has been on track and scheduled to operate at the beginning of 2023 fully.

“Passion For Better” continues to deliver the brand promise. SCG Vietnam has been coming up with projects for communities. The first Outdoor Gym Model in Quang Binh Province, a successful partnership between SCG, Youth Union, and the local communities, has opened. The outdoor gym aims to improve residential wellness and create a community public space. It is built from selective high-quality materials from SCG Cement – Building Materials products, including SCG Super Cement, Song Gianh Cement, SCG Smartwoods, and COTTO, adding durability and functionality. And the ongoing “SCG Sharing The Dream Scholarship” supports 40 students throughout their study at university.

To expand the circular economy concept to contribute to sustainable growth to the communities, SCG Vietnam has kicked off the first waste-segregation project at Long Son Primary school. The project has received positive support from the community and has achieved encouraging results for the first operational phase.

Mr. Roongrote said, “The operating performance in 2020 remained resilient amid challenges posted by the COVID-19 pandemic, thanks to the collective effort of SCG employees who placed great priority on safety and business continuity. The team   adopted new strategies and introduced a series of agile business approaches from modifying business plans, altering sales proportions, and developing Active Omni-Channel to meet changing customer behaviors. These efforts enabled SCG to deliver a comprehensive range of innovations, products, services, and solutions that catered to the market’s demand. Going forward, SCG will continue to implement a hybrid workplace model that allows SCG employees to work from home and use technologies to interact with partners and provide customer services. SCG staff at production and maintenance facilities will continue to adopt a “pod approach” where areas and functions are segregated to ensure minimal contact between critical and non-critical staff. Staff working overseas will be kept at the production site to keep operations going undisrupted. And staff having contacts with outside customers will follow strict hygienic practices to ensure customers’ confidence. With proactive measures and determination of all SCG people, I believe SCG will once again overcome the uncertainties raised by the new wave of COVID-19 pandemic.

Chemicals Business’s operations have been running smoothly both in Thailand and overseas with robust business continuity management and sales portfolio management. The business has increased the sales of plastics for the production of consumer products that are in high demand such as food packaging, beverage packaging, and e-commerce packaging. In instances where some markets are hard-hit by COVID-19, the business has shifted the sales to markets less-affected by the lockdowns. Chemicals Business has also applied digital technologies, e.g., Digital Commerce Platform which connects customers’ purchase order to supply management. The platform increases agility, reduces process time, and enhances traceability for customers.

SCG has expanded its downstream businesses and explored new businesses to create product differentiation and enhance business flexibility. For circular economy solutions, SCG has started the production of post-consumer recycled resins utilizing used plastics from community waste and constructed chemical recycling demonstration plants. By utilizing internal knowledge and expertise together with the collaboration with global partners, Chemicals Business aims to commercialize self-developed digital manufacturing solutions and become an Industrial Solutions Provider.

Cement-Building Materials Business  has increased operational efficiency by adjusting operations and business models to be consistent with increased consumers’ appetite for hygiene products and e-commerce. The business has invested in the development of Active Omni-Channel, e.g., SCG HOME online, NocNoc, and Q-Chang. Meanwhile, it also offers products and services as well as total solutions to reinforce its role as the leader in the building materials market in Thailand and ASEAN. The service offerings cover construction solutions, living solutions, and COVID-19 protection solutions, i.e., Medical Solution by CPAC BIM that harnesses Building Information Modeling technology for isolation chamber and control chamber for medical use; ventilation technology for negative and positive pressure room to ensure safety. The modular solutions offer the benefits of quick setup and budget control choice. These solutions have been installed at Saraburi Hospital and Vajira Hospital.

Besides, the business has developed innovative products to cater to hygienic needs. This includes products such as Smart Touchless automatic sanitary wares and faucets to minimize contacts, or COTTO’s Hygienic Tile that inhibits bacterial growth in the house. The business has also introduced the anti-mold and anti-UV board called SCG Smartboard Ultra Clean which incorporates easy-to-clean features and can withstand frequent disinfection wipes, making it a suitable choice for walls at hospitals, healthcare facilities, nursing homes, or dental clinics. SCG’s Solar Roof System is an energy-saving option for homeowners. Solar Roof sales have skyrocketed, registering a 182% growth compared to last year as people spend more time at home.

Packaging Business has adapted itself to cope with the economic fluctuations by further reinforcing its integrated business model to build sustainable growth in ASEAN. This also includes collaborating with businesses overseas to expand business by expanding customer base in a consumer product category as it has strong growth potential. The company has recently gained Bien Hoa Packaging Joint Stock Company (SOVI) shares to fortify its position and strength in the upstream packaging business in Vietnam. On top of that, the company also acquired Go-Pak UK Limited (Go-Pak), one of the leading foodservice solution providers in the UK, Europe, and North America, with its production facilities in Southern Vietnam. These acquisitions will augment market potential in the food packaging business.

Amid the COVID-19 challenges, the Company has pledged a foremost priority on strict hygiene measures to ensure the safety of products, employees, customers and business partners. The company is committed to developing packaging innovation and solutions. It has launched SCGP-Inspired Solutions Studio to enhance customer’s experience with packaging design solutions and Circular Economy-based packaging development. The example is R-1, flexible packaging that comprises multiple layers to offer unique properties of high-impact resistance, content protection, and recyclability. Dow Thailand Group and Khao Tra Chat have collaborated to develop eco-friendly and 100% recyclable rice packaging bags.

Some images of Operating Result Q4/2020

Mr. Roongrote Rangsiyopash, President and CEO of SCG at the Operating Result of Q4/2020 press conference.

SCG’s Solar Roof System is an energy-saving option for homeowners.

SCGP-Inspired Solutions Studio was launched to enhance customer’s experience with packaging design solutions and Circular Economy-based packaging development.

For circular economy solutions, SCG has started the production of post-consumer recycled resins utilizing used plastics from community waste and constructed chemical recycling demonstration plants.

R-1 which is a flexible packaging that comprises multiple layers to offer unique properties of high-impact resistance, content protection, recyclability and friendly with the environment.