Hóa dầu

Cement and construction products business

Amidst the challenges in many areas affecting the economy, rising energy costs and slowing purchasing power, the cement and building materials business is accelerating its adaptation to accommodate the changes by focusing on the continuous development of products, services and solutions with high added value, using technology and innovation that meets the needs of customers and creates a difference, including reducing costs through the use of renewable energy or alternative fuels to enhance business operations sustainably.

Operating results for 2022

Business Challenges

Although the COVID-19 situation has begun to improve, the tourism sector has begun to send more positive signals. However, the conflict between Russia and Ukraine has put pressure on various production costs, especially energy costs, to increase, resulting in construction material prices adjusting higher in line with costs, while household demand and purchasing power have not yet returned to normal. In addition, the global crisis has caused the cement and construction product business to quickly adapt to global trends and changing customer needs.

Business Performance

Cement-Building Materials Business recorded total sales revenue of THB 204,594 million, an increase of 12 percent from the previous year, with EBITDA of THB 17,540 million, a decrease of 7 percent from the previous year, and profit for the year of THB 3,789 million, a decrease of 11 percent from the previous year, and profit from normal operations of THB 4,670 million, a decrease of 41 percent from the previous year due to higher production costs. However, the business continues to maintain its leadership in the ASEAN market by developing new products and improving the production process to reduce carbon dioxide emissions and develop a sustainable society.

Organizational adaptation to respond to the situation in 2022

  • Finance
    • Carefully consider investments in order of importance, focusing on projects that are in line with the business strategy, such as projects to reduce energy costs or use renewable energy, automation projects, backbone investments, increase operational efficiency, and manage inventory and raw material appropriately to spread risks and maintain cash flow.
  • Business side
    • Focus on developing and expanding solutions that meet customer needs, including Green Solution Business, a construction solution that emphasizes being a One Stop Solutions to meet customer needs comprehensively through CPAC Solution Center (CSC) and expanding the Green Circularity Business to focus on creating value for resources to the utmost. In addition, there is SCG Smart Building Solution, extending the business as a leader in intelligent building management technology, investing in enVerid, a leading American startup, a provider of solutions for indoor air quality care to increase building efficiency with cutting-edge technology.
    • Reducing and sequestering greenhouse gas emissions in the cement and construction product industry, including the use of clinker replacement products by producing hydraulic cement, developing construction products such as Eco Terra tiles from recycled materials in line with the Circular Economy, Mosaic tiles that have been certified with the Carbon Footprint Product label from the Greenhouse Gas Management Organization. The business has also been certified with the Environmental Label for Circular Products or Circular Mark as the first group in Thailand.
    • Develop and launch new products that can meet usage needs and are environmentally friendly, such as SCG structural cement hybrid formula (eco-friendly cement), Tiger Mortar ready-mixed cement, Expert formula, CPAC Low Carbon Concrete, etc.
    • Develop sales channels and platforms to provide services for homeowner customers, starting from the SCGHOME Website, SCGHOME Application on Smart Phones, including opening Official Stores on various Online Marketplace or Social Commerce platforms. At the same time, improve internal business processes, such as setting up distribution centers to increase efficiency and speed in delivering products to customers, as well as manage product delivery costs to increase competitive potential.
    • Increase the proportion of renewable energy use, such as renewable energy from both sunlight and the use of hot air from the production process to generate electricity (Waste Heat Generator: WHG) to alleviate the impact of rising electricity costs and increase the use of alternative fuels, reduce imports from abroad that have high costs, increase competitiveness, such as renewable fuels from biomass, renewable fuels, or the conversion of waste to energy (Refuse Derived Fuel: RDF).
    • JWD merged with SCGJWD to provide complete logistics services to customers in all industries throughout ASEAN, including southern China, including the development of rail transportation, increasing business opportunities for entrepreneurs, helping to reduce transportation costs from the factory to the destination in China (Door to Door Service) along with import-export services and customs procedures as a One Stop Service.
    • Elevate the construction process with technology, increase operational efficiency and reduce construction waste, such as “CPAC BIM”, digital technology for design, construction and post-construction care, providing an overview of every step and reducing resource waste, “CPAC 3D Printing Solution”, construction innovation using a 3D printer to control the construction process, allowing for independent design, fast construction, labor savings, and reduced construction waste, including the development of “Chaloem Phrakiat Bridge”, the thinnest concrete bridge, the first in Thailand and ASEAN, using UHPC (Ultra High Performance Concrete) technology.
    • Develop products and solutions that meet health trends and improve quality of life, such as SCG Bi-ion, a well-being technology that helps clean indoor air, eliminates up to 99 percent of viruses and bacteria in the air, and helps manage PM 2.5 dust.
    • Develop a Digital Logistics system to provide services to customers to increase efficiency and manage transportation. By developing the TRUCK GO platform, transportation operators can save more than 50 percent in costs.
  • People side
    • Create Capability Competitiveness for employees at all levels in SCG to be ready to adapt to rapid business changes in 2 areas: Leadership Skill and Business Competitiveness Skill, focusing on Speed, Execution, Adaptability and Tell the Truth to aim to create business competitiveness for employees.
    • Create driving forces for business operations and employee performance in all sectors to be in line with ESG guidelines by setting guidelines for operations in accordance with the SCG Code of Conduct to focus on creating fairness and social responsibility.

Conducting business in line with ESG principles for sustainability

  • Aiming for Net Zero : In line with SCG’s goal of achieving Net Zero greenhouse gas emissions by 2050, the cement business has implemented the guidelines of the Global Cement and Concrete Association (GCCA), such as reducing carbon dioxide from clinker production by increasing the proportion of alternative energy use and using electricity from renewable energy in cement and concrete production. In addition, as a member of the Thai Cement Manufacturers Association (TCMA), SCG has joined the announcement of “MISSION 2023” to enhance carbon neutrality in the industrial process and product use, and measures to replace clinker by focusing on hydraulic cement production, reducing greenhouse gases by 1,000,000 tons by 2023.
  • Go Green : Develop environmentally friendly products to provide an alternative for consumers through the SCG Green Choice label, such as special formula Tiger Cement plaster products, CPAC Swab Cabinet, CPAC Precast Concrete System Solution, etc. In addition, we collaborate with various sectors to support environmental friendliness.
    • SCG and Quality Construction Products Public Company Limited (Q-CON) have collaborated to recycle leftover lightweight bricks from the construction of One Bangkok, the largest and most comprehensive real estate project in the heart of Bangkok, and produce Q-CON Sound Barrier panels to be used in the walls of the underpass into the project to reduce construction waste to zero (Zero Waste), use resources efficiently, reduce environmental impacts, and elevate the Thai construction industry towards sustainability in the future.
    • SCG has collaborated with Supalai and SC Asset to use SCG Green Choice certified products in over 100 housing and condominium projects to create a sustainable low-carbon society through products such as low-carbon concrete, eco-friendly CPAC formula, Q-Con lightweight bricks, SCG eaves, and Cotto sanitary ware and faucets that help save water.
  • Lean Inequality : Promote communities to manage their own water, create community processes towards sustainable strength so that communities have water to use all year round. In 2022, join with communities to build 5,000 water retardant weirs in Lampang Province and join with educational institutions nationwide to introduce Digital Construction as part of teaching and learning to develop students with new skills and knowledge to meet the labor market needs of the construction industry in the future, as well as helping to elevate Thailand’s construction industry to be on par with international standards.
  • Emphasize cooperation : Carry out the Sea Conservation Project, restore marine natural resources by placing coral houses using 3D printing technology from CPAC 3D Printing Solution in the area of ​​Saemsarn, the Plant Genetic Conservation Project initiated by Her Royal Highness Princess Maha Chakri Sirindhorn, as well as collaborating with the Department of National Parks, Wildlife and Plant Conservation, Lamphun Province, government agencies and local communities to plant forests with participation at Mae Ping National Park, Lamphun Province, an area of ​​400 rai to restore the forest and absorb carbon dioxide according to the Natural Climate Solution (NCS) project.

Cement-Building Materials Business Consolidated Financial Information

2565 2021 2020 2019 2018
Information from the financial statement
Current assets 76,048 71,128 58,655 59,539 64,031
asset 228,277 224,226 212,615 211,573 218,316
debt 113,278 94,139 91,448 98,484 105,775
Shareholders’ equity 114,999 130,087 121,167 113,089 112,541
Information from the profit and loss statement
Sales revenue 204,594 182,529 171,720 184,690 182,952
Costs and expenses* 203,576 179,461 167,483 180,886 178,012
Profit for the year** 3,789 4,262 6,422 5,455 5,984
Profit from normal operations*** 4,670 7,939 8,771 7,449 6,593
EBITDA **** 17,540 18,877 21,591 20,991 21,244

* 2019 reclassified and 2018 and 2017 adjusted business segment presentation.
** Profit for the year attributable to equity holders of the parent.
*** Profit before impairment of assets, sales of investments and others.
**** Profit before finance costs, income taxes, depreciation and amortization, including dividends received from associates.