SCG: first-quarter operating results reflect strong recovery from global downturn

Roongrote Rangsiyopash, president and CEO of SCG, at the press conference on announcing the company's first-quarter business results

The company’s operating results for this year’s first quarter with profit rising from high added-value products and services (HVA) chemical products in line with global market recovery, and consistent growth from food and beverage (F&B) packaging and e-commerce. The results were also aided by efficiency improvements which enabled cost savings.

On a year-on-year basis, its revenue from sales increased 15 per cent, profit for the period jumped 114 per cent, largely attributable to improved chemicals product spreads and higher equity income.

In the first quarter, SCG’s revenue from the sales of high value-added products and services reached VND31.904 trillion($1.39 billion), accounting for 34 per cent of total revenue from sales. Moreover, new products development (NPD) and service solution such as Solar Energy solution and Smart and Functional solutions, amounted to 1 and 5 per cent of total revenue from sales.

Besides, SCG’s revenue from outside of Thailand together with export from Thailand reached VND39.311 trillion ($1.7 billion) in the first quarter, a 42 per cent jump of total revenue from sales, an increase of 14 per cent on-year.

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For SCG’s operations in ASEAN (ex-Thailand), the revenue from sales during the period surged 11 per cent on-year, amounting to $1.06 billion, equal to 26 per cent of the company’s total revenue from sales. This includes sales from both local operations in each ASEAN market and imports from the Thai operations.

As of March 31, SCG’s total assets amounted to $25.54 billion, while the total asset value of SCG in ASEAN (ex-Thailand) were $9.66 billion, equal to 38 per cent of SCG’s total consolidated assets.

In the first quarter, SCG’s total assets in Vietnam came to VND116.878 trillion ($5.1 billion), an increase of 41 per cent on-year, mainly from the chemicals business. The company reported first-quarter revenue from sales at VND8.21 trillion ($356.9 million), a 34 per cent jump on-year mainly from operations from packaging (VKPC), chemicals (TPC), and Thailand exports.

In tackling the COVID-19 pandemic, SCG Packaging (SCGP) extended assistance to local authorities in Vietnam’s northern province of Hai Duong and donated 100 paper beds to the field hospitals.

The ongoing "SCG Sharing the Dream Scholarship" flagship programme has reached its 14-year milestone, having funded over 5,000 students nationwide to pursue educational aspirations. The programme manifested its impact by encouraging the young, providing financial aids, and initiating knowledge-sharing communities on sustainability, ethics, and leadership.

In business, SCG is growing alongside local partners. In February, SCGP partnered with Duy Tan Plastics Manufacturing Corporation which provides PET preforms, plastic bottles, caps and closures, and industrial plastic products to multinational companies and local fast-moving consumer goods brands.

SCG and Duy Tan will upgrade technologies, cultivate branding, and enhance human resources. As for the ceramics business, SCG and its business partner Prime Group successfully exported "Made in Vietnam" ceramic tiles to the global market.

Roongrote Rangsiyopash, president and CEO of SCG, unveiled in a recent conference announcing the company’s first-quarter 2021 business results that during the period, the company’s unreviewed operating results registered revenue from sales of VND93.897 trillion ($4.1 billion), an increase of 26 per cent on-quarter, thanks to better performances in all businesses.

Meanwhile, profit for the period touched VND11.472 trillion ($498.8 million), an increase of 85 per cent on-quarter from all businesses.

This was driven by Chemicals Business’ higher sales volume from the completion of Map Ta Phut Olefins (MOC) turnaround in the fourth quarter last year, the start-up of the second phase of MOC Debottleneck’s operations, healthy global demand and higher equity income.

The quarterly growth was also driven by seasonal improvements in the Cement-Building Materials Business as well as higher contribution from the Packaging Business by active downstream portfolio expansion and the existence of a diverse customer base.

“The first-quarter operating results is the testament to the global economic recovery. Nevertheless, there remains a high degree of uncertainties, particularly in the second half of 2021, and SCG is committed to building resiliency via driving higher sales from HVA segment and adopting digital technology to enhance production line and cost management,” said Roongrote.

“Simultaneously, SCG continues to prioritise safety and has implemented strict COVID-19 preventive measures for employees, customers, and stakeholders. Business Continuity Management (BCM) enables the company to continue delivering products and services, as well as providing solutions to customers.”

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Additionally, SCG is committed to doing business in ways that are aligned with the environmental, social, and governance (ESG) framework through the development of innovative products, services, and solutions catering to circular economy, medical and healthcare, and electric vehicles (EV) industries.

Recently, SCG signed an agreement to purchase a stake in Portugal’s recycled plastic business in order to pursue longer-term business opportunities in these aforementioned segments.

At present, there are 103 products classified as SCG Green Choice and are expected to increase to 135 products this year. These products reduce natural resource use and energy consumption, as well as have extended shelf life, providing viable alternatives to environmentally-conscious consumers.

In this year’s first quarter, revenue from sales of SCG Green Choice products accounted for VND35.104 trillion ($1.53 billion), or 37 per cent of the total revenue from sales.

Furthermore, SCG increased the use of solar energy in its production processes. In 2020, solar energy use amounted to 88,125MWh. For January to February 2021, the amount totalled 14,769MWh. Similarly, the use of alternative fuel increased in line with SCG’s Zero Coal Initiative.