SCG sees strong growth, faces economic challenges

SCG reported profit growth in the second quarter, driven by economic recovery in Vietnam and Indonesia, as the company showed steady sales improvement and sustainable performance.

The company is implementing strategies to address domestic economic headwinds and global uncertainty, including cost-cutting measures, integrating artificial intelligence and shifting to low-carbon cement production.

Thammasak Sethaudom, president and CEO of SCG, reported second-quarter revenue of PHP202.456 billion (USD3.542 billion), an increase of three percent compared to the previous quarter.

During the same period, net profit increased 53 percent to PHP5.856 billion (USD0.2 million).

SCG’s total revenue for the first half of the year was PHP398.707 billion (USD6.976 billion), almost in line with the previous year’s results.

The company’s revenues were mixed across all of its business units, with SCG Chemicals accounting for the largest share of 39 percent.

SCG has managed to maintain its growth trajectory through a number of strategic initiatives, despite headwinds such as the crisis in the petrochemical sector, strong competition and a slowdown in the domestic economy.

The company has increased its use of alternative fuels at its cement plants to reduce energy costs, achieving a 47 percent alternative fuel utilization rate in Thailand.

SCG also focuses on high-growth segments such as solar energy solutions and is investing in technologies to optimize the supply chain and distribution network.

The company has used artificial intelligence to increase operational efficiency by adapting its product offering to customer needs, as exemplified by its CPAC compact concrete mixers for urban construction.

SCG’s sales in the first half of 2024 were strong, with new products and green initiatives contributing significantly to the company’s overall performance.

High-value-added products and services accounted for 39 percent of total sales, while environmentally friendly SCG Green Choice brand products accounted for 54 percent.

The company also saw significant growth in its overseas operations, with 44% of its total revenue generated outside Thailand.

SCG reported solid financial results in the second quarter, supported by strong economic recovery in Vietnam and Indonesia.

However, the company warned that the overall economic situation remains difficult, especially in Thailand where the economic recovery has been slower.

To address these challenges, SCG has accumulated a significant cash reserve of PHP124.616 billion (USD2.18 billion) and is focused on innovative solutions to meet customer needs.

The company is also benefiting from infrastructure development in Indonesia and Vietnam, where government spending is rising.

SCG is also increasing its international presence and product offering.

The company is aggressively promoting its low-carbon cement, with exports to the U.S. exceeding one million tons. Expansion into Vietnam and Australia is underway.

SCG is diversifying its offering and its distribution arm, SCG Distribution and Retail, is expanding its retail operations in ASEAN, with Mitra10 leading the way in this space.

SCG Smart Living introduces new landscaping materials and HVAC systems.

The company has also made significant progress in the construction materials sector, focusing on high-value products and expanding into new markets such as India.

SCG Chemicals recovers from plant disruptions but faces industry challenges. To mitigate risks, the company is investing in green innovation and plastic recycling.

The company said the upcoming Long Son Petrochemicals project is a key growth driver.

The company said SCG Packaging is increasing its production capacity to meet growing demand, especially in the tourism and services sectors.

The company also deals with medical supplies and laboratory equipment. SCG Cleanergy focuses on solar energy and energy storage solutions.

SCG’s ASEAN operations showed strong growth, driven by the recovery in Vietnam. The company continues to invest in R&D, with a focus on sustainability and innovation.

SCG’s commitment to the local market is evident through initiatives such as the NATCON-CONEX 2024 exhibition and dealer recognition programs. The company is poised to capitalize on growth opportunities in the ASEAN region and beyond.