Vietnam key to SCG’s ASEAN expansion

SCG’s president and CEO Kan Trakulhoon said, “Vietnam has been chosen as a strategic ASEAN market since 1992. We will continue increasing our investment in this lucrative market, and further strengthen our niche in other regional markets. We will continue operating here in cement-building materials, paper and chemicals, all of which are core SCG operations.”

In 2012, SCG in Vietnam recorded sales revenues of VND6.739 trillion ($325 million), up 11 per cent against 2011. During the first half of 2013, the group reported VND4.899 trillion ($230 million) in revenue, an increase of 43 per cent year-on-year.

December 2012 saw SCG spend VND5.120 trillion ($240 million) acquiring an 85 per cent stake in Vietnam’s Prime Group Joint Stock Company, a major manufacturer of ceramic tiles in Vietnam. The acquisition of Prime was a strategic move to consolidate the competitive edge of SCG in ASEAN.

“We have witnessed tremendous growth and changes in the business landscape as well as socio-political aspects here in Vietnam,” Trakulhoon said. “Right now, with an emerging economy, large, young and dynamic population, favourable business environment, and upcoming ASEAN Economic Community, Vietnam definitely has advantages that inspire our continued commitment to making it our strategic market.”

SCG is currently doing quite well in Vietnam, with 19 operations and more than $615 million in total assets and the workforce of 6,500 local employees. SCG is also seeking other investment opportunities in Vietnam including investing in a $4.5 billion petroleum complex project. SCG holds a 46 per cent stake in the project which is expected to be operational within the next few years.

SCG’s subsidiaries in Vietnam include Viet-Thai Plastchem Co Ltd, TPC Vina Chemical and Plastic Corporation Co, Vina Kraft Paper Co, SCG Building Materials Co, Concrete Products and Aggregate (Vietnam) Co Ltd and CPAC Monier (Vietnam) Co Ltd.

Besides Vietnam, SCG continues to expand in other ASEAN markets. Last year, SCG embarked on expansion plans in Indonesia, making several investments, including a 1.8 million tonne per year cement plant, a 2.2-million cubic metre per year ready-mixed concrete business, and a 6-million square metre per year lightweight concrete plant.

In Cambodia, SCG has moved ahead with an additional cement manufacturing facility to add another 900,000 tonnes of capacity per year, up from the previous one million tonnes.

Likewise, SCG expanded its operations in the Philippines, increasing its stake in Mariwasa-Siam Ceramics Inc., a leading ceramic tile company, from 46 per cent to 83 per cent.

Moreover, SCG’s cement plant construction project in Myanmar has been approved by the Myanmar government. The project will meet an increasing demand for cement in Myanmar while at the same time raise SCG’s cement-building materials leadership profile in ASEAN.

SCG’s ASEAN region operating figures, exclusive of Thailand in 2012, reported revenues from sales of VND20.805 trillion ($1.004 billion), accounting for 8 per cent of the group’s total revenues, up 39 per cent against 2011. SCG’s assets in ASEAN amounted to VND36.867 trillion ($1.805 billion), or 14 per cent of the group’s total assets.

For SCG’s business expansion in Thailand, SCG invested in a 31 per cent stake in Siam Global House Public Company Limited, marking the group’s entry into the building material products retail trade business via a chain of warehouse stores which have recorded high growth rates. The objective is to achieve a synergy of expertise to enhance the capabilities and opportunities for future business expansion both in Thailand and ASEAN.