SCG tags Vietnam as strategic growth base

SCG president and CEO Kan Trakulhoon

SCG’s vision to become an ASEAN sustainable business leader has focused on developing high value-added products. The group has also expanded its business throughout the ASEAN region, with an emphasis on sustainability through strong management and sustainable development principles that balance economic, social and environmental growth.

“SCG hopes to create a more sustainable future for everyone, based on the successful co-existence of business and society,” said SCG’s president and CEO Kan Trakulhoon.

SCG’s early expansion in Southeast Asia has enabled SCG’s core businesses to evolve, especially in the group’s strategic countries of Vietnam, Indonesia, the Philippines and Myanmar.

Vietnam is the key factor for SCG’s future plans to become an sustainable ASEAN business leader in 2015. The country has gained a reputation as one of the brightest economies in Southeast Asia and is set to become more competitive through the creation of the ASEAN Economic Community (AEC) in 2015. Moreover, the nation’s growing population together with its attraction as an investment destination is another driving force in the country’s popularity.

“SCG is confident in Vietnam and values the country as a strategic base where we continue to look for new investment opportunities. We will be undertaking a significant expansion of our subsidiary companies in our core businesses: SCG Cement-Building Materials, SCG Chemicals and SCG Paper, in order to keep up with the growing demand in Vietnam and ASEAN.”

“Chief among them are an acquisition of an 85 per cent stake in Prime Group Joint Stock Company (Prime Group), Vietnam’s leading building materials manufacturer, and the investment of $4.5 billion in the Long Son Petrochemicals plant in southern Ba Ria - Vung Tau province,” Trakulhoon said.

In 2012, SCG reported sales revenue in Vietnam of VND6.739 trillion ($325 million), up 11 per cent on-year, due to increased demand for packaging paper. SCG also recently reported 2013 second-quarter sales revenues of VND3.136 trillion ($147 million).

“More broadly, we are committed to building our presence in the country, strengthening our relationships, lifting the partnership with our stakeholders here by collaborating and developing business together in order to provide an even more stable foundation when the AEC becomes a reality,” Trakulhoon said.

“The ASEAN region represents a future growth market with enormous economic potential compared to, for example, the struggling economies of Europe and the United States. With the AEC set to launch in 2015, all roads indeed lead to ASEAN,” he added.

SCG’s strategy has seen the group amass an increasingly lucrative portfolio in ASEAN, with its total assets excluding Thailand, of 55.3 billion baht ($1.77 billion), or 14 per cent of the group’s total assets of 395.573 billion baht ($12.66 billion), as of 2012.

SCG’s sales revenue last year reached more than $1 billion in ASEAN, or approximately 8 per cent of the group’s total sales, which marked an increase of 39 per cent over the previous year.

“SCG will continue to invest abroad, focusing on becoming a sustainable business leader in ASEAN by 2015 with an investment budget of 150-200 trillion baht ($4.8-$6.4 billion) for the 2012- 2017 period,” Trakulhoon said.

This would mark a shift in the group’s strategy, with the majority of investment focused on ASEAN. Simultaneously, guidelines have been established in order to prepare for investments in other countries outside the ASEAN region in the future.

“These are all considered markets which offer opportunities for future growth. SCG plans to become a regional leader, before moving on to becoming a global leader,” Trakulhoon said. “SCG considers the development of the AEC as vital. We believe that regional co-operation in investment, in the development of high valued added products and services, and in the advancement of human resources will lay a solid foundation for ASEAN’s overall economic progress.”