SCG reports $1.4 billion in sales revenue

SCGC (SCG Chemicals) has accelerated its LSP venture in Vietnam by increasing the use of ethane gas feedstock, which helps reduce costs and enhance long-term competitiveness. The company has secured a long-term supply agreement for approximately one million tonnes of ethane gas per year over 15 years and chartered three ethane shipping vessels under long-term contracts.

Sales revenue in Vietnam was $363 million in the fourth quarter of last year, marking a 7 per cent increase on-year, primarily driven by revenue growth in SCG Chemicals (SCGC), particularly polyethylene exports to Vietnam from Thailand.

SCG continues to strengthen its commitment to sustainable development, driving growth through its 'Inclusive Green Growth' framework. In the cement and green solutions business, SCG expanded low-carbon cement production in southern Vietnam, achieving a daily export capacity of 8,000 tonnes to international markets, including the United States, Canada, and Australia. The launch of STARMAX Cement’s new brand identity highlights SCG’s dedication to green innovation and quality. Additionally, Vietnam’s first SCG Home Store was launched in Hanoi, improving customer access to enhanced building solutions.

In the decorative surfaces and bathrooms sector, SCG Decor (SCGD) completed two production facilities for large-size Grazie porcelain tiles in central and northern Vietnam, with plans to further expand capacity in Pho Yen by mid-2025. The first V-Ceramic outlet in southern Vietnam now markets premium tiles and sanitary ware for local customers.

In the packaging business, Duy Tan Plastics, part of SCGP, opened a new distribution hub in Hanoi last year, optimising logistics and customer service for northern Vietnam.

SCGJWD Logistics, the parent company of SCG International Vietnam, has expanded its operations by introducing end-to-end supply chain solutions. The company signed a three-year MoU with Vietnam Construction Materials JSC, a member of SCG, which supports cement exports to the US and strengthens SCG’s global supply chain.

SCG’s sustainability efforts earned recognition with the 'CSI 2024 Top 100 Sustainable Companies Award', granted to seven SCG member companies, including Binh Minh Plastics, Vina Kraft Paper, and five entities from PRIME Group. This milestone reflects SCG’s success in reducing carbon emissions and embedding green practices across its operations.

Furthering its environmental, social, and governance (ESG) agenda, SCG co-hosted the 2024 Vietnam Circular Economy Forum with the Ministry of Natural Resources and Environment as part of Vietnam’s National Circular Economy Strategy.

On the social front, SCG awarded over 200 scholarships through its 'SCG Sharing the Dream' initiative, while SCGP organised a contest to inspire sustainable innovation in packaging design among students. These initiatives highlight SCG’s commitment to fostering inclusive growth and nurturing the next generation of ESG leaders in Vietnam.

SCG remains committed to strengthening its financial health by maintaining strong earnings before interest, taxes, depreciation, and amortisation (EBITDA), which is a core principle of business management.

Thammasak Sethaudom, president and CEO of SCG, said, "In 2024, SCG effectively managed its EBITDA, achieving $1.53 billion, the same level as 2023. This was driven by SCG’s adaptation to challenges, including the slowdown in the petrochemical cycle, geopolitical tensions, volatile energy costs, and high interest rates. Despite these challenges, SCG has maintained its financial strength and ensured continuous returns for all shareholders."

The company has been implementing reinforcement measures announced at the end of the third quarter of 2024, with significant outcomes. Working capital management has resulted in a reduction of approximately $183 million from the previous year, while restructuring operations and business activities, including discontinuing unprofitable businesses to enhance operational efficiency, and controlled capital expenditure has prioritised projects with high and quick returns. As a result, net debt has decreased by $494 million from the previous quarter, with a net debt-to-equity ratio of 0.7 times. SCG’s financial position remains strong and stable, with year-end cash reserves of $1.57 billion.

SCG reported revenue from sales last year was just shy of $14.5 billion, marking a 2 per cent increase from the previous year, driven by higher sales volumes from SCGC and SCGP. Profit for the year stood at $180 million, reflecting a 76 per cent decline from the previous year due to LSP’s performance and lower profit contributions from associate companies. Excluding extraordinary items in 2023, which included an impairment loss on regional cement plant assets and gains from the fair value adjustment of investments, profit for the year declined by 52 per cent from the previous year.

Revenue from sales hit $3.7 billion for the fourth quarter, an increase of 2 per cent from the previous quarter, supported by higher sales volumes from SCGC. However, the company reported a loss of $15 million for the same period, compared to a profit of $20 million in the previous quarter, primarily due to LSP’s performance and the recognition of full depreciation expenses for the venture. In contrast, the previous quarter included a cash gain of $62 million from an interest-rate swap transaction recorded by SCGC.

SCG announces Q2 operating results with sustained growth SCG announced its operating results for the second quarter of 2024 on August 1, highlighting increased sales and profit compared to the previous quarter, driven by the economic recovery in Vietnam and Indonesia.

Long Son Petrochemicals complex put into commercial operation Long Son Petrochemicals (LSP), a subsidiary of SCG Chemicals (SCGC) and a member of SCG Group, announced the start of commercial operations at Vietnam’s first integrated petrochemical complex on September 30.

SCG to pour $700 million into ethane feedstock enhancement project The Siam Cement Public Co., Ltd. (SCG) announced on October 30 that Long Son Petrochemicals Co., Ltd. (LSP) is moving ahead with an ethane enhancement project, with a budget of $700 million.