SCG focuses on navigating economic challenges

SCG recently announced its operating results for the second quarter of 2024, reporting a surge in its profit buoyed by economic upturns in Vietnam and Indonesia.

In line with this, the company is implementing strategies to counter domestic economic headwinds and global uncertainties, including cost-cutting measures, AI integration and a push into low-carbon cement.

Thammasak Sethaudom, SCG president and CEO, revealed that total revenue for Q2 reached P202.456 billion (US$ 3.542 billion), a three percent quarter-on-quarter increase.

Net profit surged by 53 percent to P5.856 billion (US$ 102 million) during the same period.

For the first half of the year, SCG generated a total revenue of P398.707 billion (US$ 6.976 billion), nearly matching the previous year's figures.

The company's revenue streams were diversified across its business units, with SCG Chemicals contributing the most significant portion at 39 percent.

Despite facing headwinds such as the petrochemical downturn, intense competition, and a sluggish domestic economy, SCG has managed to sustain its growth trajectory through a series of strategic initiatives.

To mitigate rising energy costs, the company has boosted alternative fuel use in its cement operations, achieving a 47 percent utilization rate in Thailand. SCG also focuses on high-growth segments like solar energy solutions and has invested in technology to optimize its supply chain and distribution network.

Furthermore, the company has leveraged artificial intelligence to enhance operational efficiency by tailoring its product offerings to meet customer needs, such as CPAC’s compact concrete mixer trucks designed for urban construction.

SCG had robust sales in the first half of 2024, with new products and green initiatives contributing significantly to its overall performance. High-value-added products and services accounted for 39 percent of total sales, while environmentally friendly products under the SCG Green Choice brand made up 54 percent.

The company also saw strong growth in its overseas operations, with 44 percent of total revenue generated outside Thailand.

By the second quarter, SCG had a strong financial performance, driven by robust economic recovery in Vietnam and Indonesia. However, the company cautioned that the overall economic landscape remains challenging, particularly in Thailand, where recovery has been slower.

To navigate these conditions, SCG has built up a substantial cash reserve of P124,616 million (US$ 2,180 million) and focuses on innovative solutions to meet customer needs. The company is also capitalizing on infrastructure development in Indonesia and Vietnam, where government spending is on the rise.

SCG is also ramping up its global presence and product offerings. The company is aggressively promoting its Low Carbon Cement, with exports to the US surpassing 1 million tons. Expansion into Vietnam and Australia is underway. In addition to cement, SCG is diversifying its portfolio. Its distribution arm, SCG Distribution and Retail, is expanding its retail footprint in ASEAN, with Mitra10 leading the charge. SCG Smart Living is introducing new landscape materials and HVAC systems.