SCG announces the operating performance for the first quarter of fiscal 2012 showing improved revenue from sales, while lower y-o-y profitability due to the trough in chemicals margins. The Group recently joined hand with Mitsui Chemicals Tohcello to establish a 1,400 MB highly-functional cast film plant. The company also reveals outstanding growth of HVA and moves ahead for ASEAN business expansion to gear up for AEC.
Mr. Kan Trakulhoon, President & CEO of SCG, disclosed the unreviewed consolidated financial statements of SCG and its subsidiaries for Q1/2012, which showed Profit for the Period of 5,972 MB, a decrease of 35% y-o-y attributed to the trough in chemicals margins from the global excess supply and global demand weakness. Revenue from Sales increased 11% y-o-y to 102,884 MB from volume growth and higher product prices in most businesses.
On a q-o-q basis, Profit for the Period increased 87% q-o-q as the cement and building materials businesses have recovered from the Q4/2011 flood disruptions. Revenue from Sales increased 17% q-o-q.
As for SCG business in ASEAN market outside Thailand, the Revenue from Sales in Q1/2012 amounted to 6,367 MB, a 21% increases from the same period of last year, which is 6% of total sales of SCG.
Total assets of SCG in ASEAN as of March 31, 2012 amounted to 52,904 MB, which is 14% of total assets of SCG.
The total assets of SCG as of 31 March 2012 amounted to 386,780 MB.
The operating results of SCG’s major businesses for Q1/2012 were as follows:
- SCG Chemicals: In Q1/2012, SCG Chemicals reported Revenue from Sales of 52,900 MB, an increase of 9% y-o-y from the increase in sales volume. Profit for the Period amounted to 1,240 MB, decreased 74% y-o-y.
- SCG Paper: In Q1/2012, SCG Paper reported Revenue from Sales of 13,985 MB, increased 2% y-o-y from packaging paper business. Profit for the Period amounted to 1,010 MB, decreased 4% y-o-y.
- SCG Cement: in Q1/2012, SCG Cement reported Revenue from Sales of 16,091 MB, an increase of 13% y-o-y. Profit for the Period registered 2,519 MB, increased 12% y-o-y.
Mr. Kan said, “With the company’s business strategy to drive High Value Added (HVA) products and services, SCG recently joined hand with Mitsui Chemicals Tohcello, Inc. (MCTI) to establish Siam Tohcello Co., Ltd. (STC) to produce highly functional cast film (LLDPE), HVA products. With total investment of 1,400 MB, SCG will hold a 45% stake, while MCTI will hold the remaining 55% stake. The operations will be located in the Eastern Seaboard Industrial Estate, Rayong Province, and will have a capacity of 15,000 tons of LLDPE cast film per year. The commercialization of production is expected by early 2014. HVA products sales in Q1/2012 which is amounted to 35,154 MB, achieved 34% of SCG total sales and increased 25% compared with the same period last year. Sales of HVA products recorded outstanding growth, started from 2004 to 2011. While SCG total sales increased by 90% during that period, HVA product sales recorded 1,400% growth or 14 times in the same period, compared with commodity product sales growth at 34%,”
“After the 2011 flood crisis, Thailand recovery has been faster than anticipation. This is also the case for the industrial sector and the construction businesses. During this period, SCG has also taken parts in Thailand’s rehabilitation and at the same time came up with a creative innovation of disaster-response housing to cope with recurrence of disasters in the future. In the latest move, SCG has developed a new series of SCG Heim, home innovation that is inhabitable during disasters such as floods or earthquakes. SCG Heim, as well as floating houses, will be exhibited at the 2012 Architect’55, located in the Challenger Hall of Impact Muang Thong Thani during April 24-29, 2012” added Mr. Kan
“As for our ASEAN business expansion plan, SCG continues to move ahead with its vision to gear up for the establishment of ASEAN Economic Community. In the latest move, Thai Plastic and Chemicals (TPC) has bought shares in two Vietnamese plastic pipe producers, Binh Minh Plastics Joint Stock Company (BMP) and Tien Phong Plastics Joint Stock Company (NTP), amounting 16.73% and 22.67% respectively.
For the Indonesian market, after having completed the transaction to acquire the entire stake in Boral Indonesia (BI), a leading ready-mix concrete producer in Indonesia, SCG Cement has begun to integrate BI into SCG’s business portfolio. SCG’s ASEAN businesses continue to see expansion growth, as an approximate 10,000 of its employees are now working outside of Thailand, representing 26% of the company’s total workforce, when compared to SCG’s base case estimate of 25% in 2015,” added Mr. Kan.