SCG, leading business conglomerate in the ASEAN region, announced its Q1 2020 operating results, with revenue figures similar to the previous quarter despite the effects of the COVID-19 global outbreak. Backed by a proactive and solid business continuity management plan, SCG assures its partners and consumers that it will be able to face the challenges brought about by the pandemic at the same time adhere to government regulations. To ensure consumer safety and convenience, the company turns to digital technology to deliver products, services and solutions along with a strategic preparedness plan to mitigate disruption impacts and capture new opportunities.
Roongrote Rangsiyopash, president and CEO of SCG, disclosed, “The company’s unreviewed operating results for Q1 2020 registered a revenue from sales of PHP171,685 million (US$3,379 million), a decrease of 6 percent YoY mainly from lower chemicals prices due to weak global demand. The revenue figure, however, was similar to the previous quarter, with increased revenues from cement-building materials and packaging businesses offsetting decreased revenues from the chemicals business. Meanwhile, profit for the period reached PHP11,318 million (US$223 million), a decline of 40 percent YoY and 2 percent QoQ due to the decline in the performance of the chemicals business in light of decreased product margins.
In Q1 2020, SCG’s high value-added products and services (HVA) sales revenue reached PHP74,882 million (US$1,474 million), accounting for 44 percent of the company’s total revenue from sales. HVA sales grew by 1 percent YoY and 10 percent QoQ. Spending on innovation research and development, meanwhile, totaled PHP2,228 million (US$44 million) or 1.3 percent of total revenue from sales.
SCG’s revenue from performance businesses outside of Thailand, including export sales from Thailand, for Q1 2020 registered PHP72,835 million (US$1,433 million), an increase of 3 percent YoY and accounting for 42 percent of total revenue from sales. Revenue from export sales from Thailand went down 9 percent YoY at PHP39,485 million (US$777 million) or 23 percent of total revenue from sales.
SCG in ASEAN (ex-Thailand)
For SCG’s operations in ASEAN excluding Thailand, revenue from sales in Q1 2020 recorded 8 percent growth YoY at PHP46,762 million (US$920 million), which is 28 percent of SCG’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 PHP1,102,537 million (US$21,681 million) while the total assets of SCG in ASEAN (ex-Thailand) amounted to PHP379,598 million (US$7,464 million), which is 34 percent of SCG’s total consolidated assets.
Based on the Q1 2020 report, SCG in the Philippines owned PHP19,975 million (US$393 million) worth of total assets, an increase of 53 percent YoY, mainly from the packaging business. The company reported Q1 2020 revenue from sales at PHP3,361 million (US$66 million), including sales from both operations in the country and imports from the Thai operations. The 25 percent decrease YoY is mainly attributed to the lockdown policy.
SCG is able to maintain company operations and production during the COVID-19 pandemic by implementing a full-blown business continuity management plan. SCG’s top priority is its stakeholders’ health and safety, thus the strict social distancing measures. The company also leveraged digital infrastructure such as a cloud-based tool to assist employees working from home.
To support the fight against COVID-19, SCG and its subsidiaries donated face masks, PPEs and rice sacks for frontliners in Calumpit, Bulacan and Sto. Tomas, Batangas.
Meanwhile, United Pulp and Paper Co., Inc. (UPPC), in its effort to continuously give back to the environment, planted 1,000 germinants of Malaruhat trees at the La Mesa Watershed last January 23, 2020.
Roongrote said, “Global economies are significantly affected by the COVID-19 pandemic. As the society, our partners and employees face these difficult times, SCG hopes to contribute to the economy by maintaining its strong market performance as seen in Q1 2020 operating results keeping stable compared to the previous quarter. The company continues to be proactive in running its business with a solid business continuity management plan. Ninety percent of our employees are encouraged to work from home as we streamline end-to-end supply chain management and ensure the delivery of products, services and solutions to customers. The company also seeks new opportunities to serve evolving needs, including shifting sales to online platforms or considerably catalyzing the use of blockchain for procurement, invoicing and payment with partners.”
The company’s Packaging Business remains capable of providing customers with integrated packaging products and services promptly and as scheduled, especially with the surge in food delivery and online shopping. Social distancing and proper sanitation are observed during manufacturing and transportation. A similar approach is practiced in factory management in Thailand, Vietnam and Indonesia.
The Cement-Building Materials Business has enhanced its retail e-commerce platform by using an omnichannel approach comprising website, applications and social media while offering home delivery nationwide on top of online home consultation services. With web-enabled retail services, customers can avail services and products in the comfort of their homes and be assured that proper sanitation practices are met during installation and delivery. SCG Logistics established stringent sanitary measures from warehouse to product delivery and offered fresh grocery delivery, which is now in high demand. As a result, online sales skyrocketed compared to the previous quarter.
The Chemicals Business focuses on adopting business strategies aimed at cost reduction and increased competitiveness to stand out in a volatile and challenging environment. It realigns the proportion of plastic resin sales to meet the changing demands by leveraging its extensive customer network around the globe to boost sales opportunities in less-affected spaces such as food and delivery packaging. Likewise, it amps up proactive sanitary actions against COVID-19 to maintain its high standard of business operations. These include applying stringent measures to ensure the safety of employees and partners, making the complexes in Rayong a “Zero COVID-19 Zone” and adjusting the value chain to ensure consistent and safe product and service delivery, and accelerating the development of HVAs. These efforts are aimed at ensuring the company fulfills the customers’ needs at present and in the future.
SCG is a leading ASEAN business conglomerate with regional focus and established commitments toward business conducts that are in line with good corporate governance and sustainable development principles. Established in 1913, following the royal decree of His Majesty King Rama VI, SCG’s cement products were the essential materials for the construction of Thailand’s infrastructure projects during that period, which have contributed greatly towards the country’s modernization. Since its inception, SCG has grown continuously and has earned widespread recognition as a role model for other businesses, both locally and internationally.
Today, SCG is comprised of three core business units, namely cement-building materials, chemicals and packaging. With more than 200 companies under its umbrella and approximately 53,000 employees, SCG creates and distributes innovative products and services that respond to the current and future needs of the consumers.
SCG has been present in the Philippines since 1993. With more than 1,400 employees, SCG has been running sustainable businesses through many subsidiaries. Chiefs among them include SCG Marketing Philippines, Inc., Mariwasa-Siam Ceramics Inc., SCG International Philippines, Inc., and United Pulp & Paper Co. (UPPC).